Superannuation funds have recorded another impressive year of returns for members with international technology and Australian banking shares driving above average returns over 2024. Concerns over inflation caused a slow start to the year, with multiple negative monthly returns recorded until October 2023. Increased confidence in the outlook for inflation and ongoing developments in artificial intelligence led a market rally from November to March and while higher than expected inflation data led to a stumble in April, returns recovered quickly to finish the year strong. Given the significant range of outcomes across different months it remains important to focus on longer term outcomes, with funds continuing to prove they can deliver good outcomes over various market cycles.
All Balanced funds, those with a strategic allocation of between 60% to 76% of their portfolio invested in growth assets, are expected to deliver positive returns to members, while the top performing funds provided members with double digit returns over the financial year. Hostplus’ Indexed Balanced option was the top performing option in the SR50 Balanced (60-76) Index for the year ending June 2023, returning 12.2%, closely followed by Raiz Super’s Moderately Aggressive option and Colonial First State’s Enhanced Index Balanced option with returns of 12.1% and 11.4% respectively.
Top 10 Balanced options over 12 months to 30 June 2024
| Rank | Option Name | 1 Year % | 10 Year % p.a. |
| 1 | Hostplus – Indexed Balanced | 12.2 | 7.7 |
| 2 | Raiz Super – Moderately Aggressive | 12.1 | – |
| 3 | CFS-FC Wsale Pers – CFS Enhanced Index Balanced | 11.4 | 6.7 |
| 4 | ESSSuper – Balanced Growth | 11.1 | – |
| 5 | IOOF Employer Super – MLC MultiSeries 70 | 10.9 | 7.0 |
| 6 | Brighter Super – Balanced | 10.6 | – |
| 7 | GESB Super – My GESB Super Plan | 10.4 | 6.6 |
| 8 | Qantas Super – Growth | 10.1 | 7.3 |
| 9 | Australian Retirement Trust – Super Savings – Balanced | 9.9 | 8.1 |
| 10 | MLC MKey Business Super – MLC Balanced | 9.6 | 7.0 |
| SR50 Balanced (60-76) Index^ | 8.8 | 7.0 |
^ indicates interim result.
Returns are after investment fees and taxes and are rounded to one decimal place; however, rankings are determined using unrounded data held by SuperRatings. Based on options included in the SR50 Balanced Index.
The table above displays the top performing balanced funds for the year to 30 June 2024, as well as showing 10-year returns for options with a 10 year performance history, an important consideration given the long-term nature of superannuation investments.
In a repeat of 2023, funds with a higher exposure to shares and listed assets generally outperformed for the year, while those with greater exposure to unlisted property reported more subdued outcomes. As a result, members who were invested in index funds generally outperformed more actively managed options, given the strong focus on, and allocation towards, listed shares.
Top 10 Balanced Index options over 12 months to 30 June 2024
| Rank | Option Name | 1 Year % | 5 Year % p.a. |
| 1 | Aware Super Future Saver – Balanced Indexed | 12.9 | – |
| 2 | Hostplus – Indexed Balanced | 12.2 | 7.2 |
| 3 | Rest – Balanced Indexed | 12.2 | 7.1 |
| 4 | Australian Retirement Trust – Super Savings – Balanced Index | 12.1 | 6.6 |
| 5 | Brighter Super – Indexed Balanced | 12.0 | 7.2 |
| 6 | HESTA – Indexed Balanced Growth | 11.9 | – |
| 7 | netwealth Super Accelerator – Index Opportunities Growth Fund | 11.5 | 5.3 |
| 8 | AustralianSuper – Indexed Diversified | 11.5 | 7.0 |
| 9 | Cbus – Indexed Diversified | 11.4 | – |
| 10 | NGS Super – Indexed Growth | 11.4 | 6.0 |
Returns are after investment fees and taxes and are rounded to one decimal place; however, rankings are determined using unrounded data held by SuperRatings. Based on index options tracked by SuperRatings.
The top performing indexed fund was Aware Super’s Future Saver – Balanced Indexed option with a return of 12.9% for the year to June, while all top 10 indexed options returned double digits to members.
Top 10 MySuper Lifecycle options over 12 months to 30 June 2024
| Rank | Option Name | Growth Assets % | 1 Year % | 10 Year % p.a. |
| 1 | Colonial First State Essential Super MySuper – LifeStage 1975-79 | 90 | 14.6 | – |
| 2 | Colonial First State First Choice MySuper – LifeStage 1975-79 | 90 | 14.4 | 7.6 |
| 3 | Virgin Money Super – LifeStage Tracker Born 1979 – 1983 | 90 | 13.2 | – |
| 4 | Vanguard MySuper – Lifecycle Age 47 and under | 90 | 13.2 | – |
| 5 | Mine Super MySuper – Lifecycle Investment Strategy Under Age 50 | 95.2 | 12.5 | 8.2 |
| 6 | Russell iQ Super MySuper – MySuper GoalTracker Age 50 and Under | 95 | 12.3 | – |
| 7 | GuildSuper MySuper – Growing LifeStage | 75 | 11.6 | 7.5 |
| 8 | Mercer SmartPath – MySuper Born 1979 – 1983 | 85 | 11.6 | 7.9 |
| 9 | AMP SignatureSuper – MySuper 1970s | 91 | 11.1 | 7.6 |
| 10 | Aware Super Future Saver – MySuper Lifecycle High Growth | 88 | 10.9 | 8.8 |
Returns are after investment fees and taxes and are rounded to one decimal place; however, rankings are determined using unrounded data held by SuperRatings. Based on MySuper Lifecycle options for a member aged 45 or under tracked by SuperRatings.
Members who are invested in default options have also done well over the year with funds that have adopted a lifecycle investment style outperforming single default options. This is due to their higher allocation to shares, particularly for younger members. We have noticed a trend of lifecycle options increasing their exposure to growth assets such as shares over the past 12 months. While this has benefited members this year, higher exposure to these assets also comes with increased ups and downs, and we encourage members to learn how their fund’s investment strategy works so they are comfortable with annual and long-term performance outcomes.
Top 5 Sustainable Balanced options over 12 months to 30 June 2024
| Rank | Option Name | 1 Year % | 5 Year % p.a. |
| 1 | Raiz Super – Emerald (SRI) | 14.8 | 8.4 |
| 2 | UniSuper – Sustainable Balanced | 12.2 | 7.0 |
| 3 | Vanguard Super SaveSmart – Ethically Conscious Growth | 12.2 | – |
| 4 | Aware Super Future Saver – Balanced Socially Conscious | 11.1 | 7.5 |
| 5 | Future Super – Balanced Index | 10.1 | 5.3 |
Returns are after investment fees and taxes and are rounded to one decimal place; however, rankings are determined using unrounded data held by SuperRatings.
Investments with a sustainable focus have also outperformed over the year with Raiz Super’s Emerald investment option reporting the highest balanced option return at 14.8%. The option was also the top performing sustainable option over 5 years, with a return of 8.4% per annum.
While annual returns display interesting trends the purpose of superannuation is maximising returns over the long term. Most people will have plenty of time until we retire and begin to access our superannuation, therefore it is important to block out as much of noise as possible and focus on the long term.
Top 10 Balanced options over 10 years to 30 June 2024
| Rank | Option Name | 1 Year % | 10 Year % p.a. |
| 1 | Hostplus – Balanced | 7.6 | 8.3 |
| 2 | Australian Retirement Trust – Super Savings – Balanced | 9.9 | 8.1 |
| 3 | AustralianSuper – Balanced | 8.5 | 8.1 |
| 4 | UniSuper – Balanced | 9.2 | 7.9 |
| 5 | Cbus – Growth (MySuper) | 8.4 | 7.7 |
| 6 | Hostplus – Indexed Balanced | 12.2 | 7.7 |
| 7 | Vision Super – Balanced Growth | 8.4 | 7.6 |
| 8 | HESTA – Balanced Growth | 9.1 | 7.6 |
| 9 | CareSuper – Balanced | 8.5 | 7.6 |
| 10 | Spirit Super – Balanced (MySuper) | 8.8 | 7.5 |
| SR50 Balanced (60-76) Index^ | 8.8 | 7.0 |
^ indicates interim result.
Returns are after investment fees and taxes and are rounded to one decimal place; however, rankings are determined using unrounded data held by SuperRatings. Based on SR50 Balanced Index options with SAA of 60-76% growth assets tracked by SuperRatings.
Hostplus’ Balanced option remained the highest performing balanced option over 10 years returning 8.3% p.a.
Investing in a range of assets for different markets has served Australian superannuation funds well. While we see different assets performing better or worse each year, superannuation continues to deliver for members over the long term with annual returns of 7.1% since compulsory superannuation began in 1992.
What’s ahead in FY25?
FY24 was a year of three parts shifting from a negative environment to a market rally and then a moderate pullback. Depending on when members need to begin drawing on their funds, they may have the option to ride out these ups and downs, however for members nearing, or in, retirement minimising these fluctuations can be a key factor in their retirement planning.
Managing volatility is a key function for superannuation funds, with the need to consider downside risk increasingly evident over recent years. While this has meant some funds that were more defensively positioned didn’t benefit as much from this year’s share rally, having strong diversification supports smoother returns over the long term.
The table below shows the top 10 funds ranked according to their level of volatility, a measure of how much members are being rewarded for taking on the ups and downs in their balances.
Members in the Australian Retirement Trust QSuper product had the least ups and downs over the past seven years and returned of 5.3% p.a. over the period. This was followed by BUSSQ and CareSuper with returns of 6.1% p.a. and 7.1% p.a. respectively.
Top 10 Funds Based on Volatility-Adjusted Performance – 7 Year Return to 30 June 2024
| Rank | Option Name | 7 Year % p.a. |
| 1 | Australian Retirement Trust – QSuper Accum. – Balanced | 5.3 |
| 2 | BUSSQ – Balanced Growth | 6.1 |
| 3 | CareSuper – Balanced | 7.1 |
| 4 | CSC PSSap – MySuper Balanced | 6.7 |
| 5 | ADF Super – MySuper Balanced | 6.7 |
| 6 | NGS Super – Diversified (MySuper) | 6.6 |
| 7 | IOOF Employer Super – MLC MultiActive Balanced | 7.2 |
| 8 | Rest – Core Strategy | 6.5 |
| 9 | Active Super – Balanced | 6.6 |
| 10 | Spirit Super – Balanced (MySuper) | 6.7 |
Returns are after investment fees and taxes and are rounded to one decimal place; however, rankings are determined using unrounded data held by SuperRatings. Based on SR50 Balanced Index with SAA of 60-76% growth assets tracked by SuperRatings.
As another financial year ends and funds begin to prepare annual statements, it’s a great time to review your superannuation settings. Regularly engaging with your superannuation will be time well spent when you see the potential impact on your retirement balance. Common things to check include if the investment option you’re in is suitable for your current stage of life and risk appetite, your current insurance cover and importantly that all your contact details are up to date. Funds often offer simple risk profiling tools on their website to help with investment decisions and checking on your details has never been easier with most funds offering multiple channels to do so such as by phone, online portals and even dedicated mobile apps.
If you are thinking of making a change, there are also multiple services that can help. SuperRatings has over 440 product ratings available and funds themselves may offer access to advice services on a range of topics including investments, insurance, consolidation and retirement planning either directly or through associated adviser networks. Contact your fund to see what advice services are available but note there may be a cost for doing so. Make sure you check how much advice will cost and how you can pay for it before going ahead to ensure it’s right for you. Alternatively, you may wish to discuss your super with a trusted financial adviser to help understand whether your current super settings are appropriate for your personal situation. The Government also provides a comparison tool via the ATO website and information on how to select a financial adviser through the MoneySmart website.
Source: Lonsec