Despite a rollercoaster ride of a year, super funds have finished 2018-19 well in the black, with a late rally in June getting funds over the line with solid returns.
The start of the last financial year looked promising with two per cent returns in the September quarter. But that bright light quickly blackened with a horror December quarter that saw almost five per cent losses across the board. While the final six months was a slog for super funds, a solid performance in the June quarter brought the FY19 result to 6.9 per cent.
According to SuperRatings’ data, the top 10 funds achieved an average return of 8.5 per cent for the year. The return for the median growth option, with two thirds of the portfolio allocated to local and international shares, was 7.4 per cent over the year, while the median capital stable option returned 5.3 per cent.
Over the past decade, the super system has amassed an additional $1.3 trillion for members.
Median balanced option financial year returns since introduction of compulsory SG
* Interim return.
Australia’s leading super funds in 2018-19
UniSuper was the highest returning balanced option for the year, delivering 9.9 per cent gains, followed by QSuper and Media Super, which returned 9.7 per cent and 8.8 per cent respectively. UniSuper and QSuper have been among the top returning funds over 10 years, narrowly trailing AustralianSuper – the long-term leader with returns of 9.8 per cent a year.
Top 10 returning super funds over one year
Top 10 returning super funds over 10 years
* Interim return.
“UniSuper was a standout performer for the 2019 financial year, and they have also delivered consistently strong outcomes for their members over the past 10 years,” said SuperRatings executive director Kirby Rappell.
“While year-to-year performance can fluctuate, the ability of the fund to provide solid returns over the long term, while protecting their members’ savings against the ups and downs of the market has been key to their success.”
However, SuperRatings warns that the system could become a victim of its own success, as bigger balances are likely to feel “more of the bumps as markets move”.
“The 4.7 per cent drop we saw in the December quarter was felt more acutely for someone with a $100,000 balance than one with only $10,000,” said Mr Rappell.
“Members should enjoy the strength of returns we’ve seen over the past decade, but as more and more workers enter and exit the system, it’s important that we keep talking about how funds manage market pullbacks and other risks for their members. The uncertainty that many consumers and investors feel at the moment reminds us that super is a long-term game, and members must have an understanding of both risk and return, and the effect they have on their retirement savings.”
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