Australian super funds enjoy the strongest returns in four years

Australian super funds deposit $140 billion into the retirement kitty.

Australian super funds enjoy the strongest returns in four years

Australian super funds enjoyed the strongest returns in four years, depositing an estimated $140 billion into the retirement savings kitty and, on average, delivering double digit returns.

It is the eighth consecutive year that superannuation funds have delivered positive results.

The average fund returns for last year were 10.4 per cent and over the next four weeks, around $140 billion will have been added to super accounts.

The top performing fund for the year to 30 June 2017 was the $23 billion HOSTPLUS, which returned 13.2 per cent to around one million members.

AustralianSuper came in second delivering around 12.4 per cent to 2.2 million members

Sunsuper for Life and First State came in equal third with a gain of 12.3 per cent and rounding out the top five was Club Plus Super with 12.2 per cent returns.

“At a time when inflation hovers below two per cent per annum, Australian super funds continue to exceed expectations, with accrued earnings of well over 100 per cent since the end of the GFC. Over the past five years alone, funds have averaged 10 per cent earnings every year, more than erasing the pain of the GFC and putting retirees in a significantly improved position than they could ever have hoped for,” said SuperRatings Chairman Jeff Bresnahan.

“At the very least, Australians can have faith in our superannuation system, which has now built up an enviable track record.”

Here are the top-10 performing super funds for the 2016/17 financial year

super funds returns 2016 2017 

How did your super fund perform?

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    COMMENTS

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    MICK
    20th Jul 2017
    11:22am
    "At a time when inflation hovers below two per cent per annum" - tell that to anyone who buys the groceries, pays council rates, pays the electricity bills, has private health insurance and pays any other government entity.
    This is the greatest being sold as fact at present and those struggling to pay the bills know this.

    The greater worry about superannuation is that government of either persuasion have been circling the money pool for years and are working on ways to get their grubby hands on some of it. I'd be willing to bet that nationalising superannuation will be where this is going to end.
    Retired Knowall
    20th Jul 2017
    12:13pm
    Show any proof that the Govt. has been planning to "get their grubby hands on some of it".
    Just give us FACTS not your obvious biased rants.
    Anonymous
    20th Jul 2017
    2:12pm
    Mick - you're one sad old leftie always spinning negativity even on great news suck as this
    Anonymous
    20th Jul 2017
    4:41pm
    Retired Knowall, when Swan (the world's greatest treasurer) was in power, he asked Treasury to look at how a part of super funds could be used for infrastructure and was told that it was not possible. It's not a giant leap to suggest that politicians would love to have access to all that cash. To paraphrase Keating, don't get between a politician and a bucket of money.

    Raphael, MICK and I have rarely agreed but he is right in what he says. He is not bagging the good result, just the rhetoric surrounding it. We, like a lot of participants in this forum, are on a fixed income and the weekly shop is getting more expensive and it's not just "below two per cent per annum". The CPI has more goods left off than are counted and most of the items left off are important such as fuel.
    MICK
    20th Jul 2017
    5:03pm
    Returns have been spectacular for super. That is a good result for Australians. My issue is that both sides of politics always look for more and more money wherever they can easily get it and the Sovereign Wealth Fund is there like a Park Bench with a 'wet paint' sign on it. Neither side has touched it yet but both want to. One day they will.
    I read fairly widely on some topics and the belief from some commentators is that a government in the future will nationalise superannuation. After that it would be a bit like pensions which were originally a part of the tac system and placed into an account for when Australians reached retirement age. The bastards then lumped this into Consolidated Revenue and then pensions were gone. Now workers are told the pension is not an entitlement....unless you are a well paid public servant.
    Cheers.
    Retired Knowall
    20th Jul 2017
    6:40pm
    Treasury to look at how a part of super funds could be used for infrastructure and was told that it was not possible. What part of that don't you understand?
    Anonymous
    21st Jul 2017
    1:09am
    Retired Knowall, treasury is told things are not possible, and then future governments find ways to make it happen. It was NEVER going to possible to take the pension fund and place it in consolidated revenue either. Pensions were safe. Retirees could rely on having security in old age. UMMMMM!

    ANYTHING is possible if pollies want it badly enough. They will find a way.
    Retired Knowall
    21st Jul 2017
    7:32am
    Thye Govt. always had and always will have complete control of Pensions, NOT SO with Super, they can change the rules and taxes but the capital is never available.
    I'm a Retiree and I have security in my old age.
    Lark Force
    21st Jul 2017
    9:39am
    Rather than hit pensions, super, gst, how about going after the tax avoiders who use trust accounts to avoid tax. $3.5Billion per annum?

    http://www.abc.net.au/news/2017-07-21/high-earners-us-trust-funds-reduce-tax-australia-institute/8729672

    What a rort!
    AutumnOz
    20th Jul 2017
    11:32am
    The article didn't say what the super funds invested in to return double digit profits.
    As our banks can only pay smaller dividends and interest rates on saving and term deposit accounts are very low, the super funds must be investing in areas of very high risk of people losing some of their superannuation savings and there is nothing they can do about it.

    As our government, of any persuasion, has a habit of dipping into payments made by workers e.g. the 7.5% of pay going into a fund for their pension entitlement when they reached 65 years. The 140 billion mentioned in the article is certain to attract the attention of the current government with a view to paying off the national debt.
    KSS
    20th Jul 2017
    12:45pm
    "The article didn't say what the super funds invested in to return double digit profits."

    Well that's probably because it is up to the superannuant to tell their superfund where to invest their money. If they didn't take that responsibility then the default investments would be made. These are different for every fund but easily available from the super fund.
    Anonymous
    20th Jul 2017
    2:16pm
    Yes it does
    In those superfund product offerings
    For example balanced growth means investment in medium risk assets so a balanced allocation beteeen shares , fixed interest deposits and bonds , real estate etc
    Rae
    20th Jul 2017
    3:39pm
    Your comment makes no sense.

    The super guarantee is 9.5% for PAYG workers. It is available after retirement at 55 currently. If someone saves enough they can retire then. They can even do casual work after retirement within set rules.

    The current government will not try to steal the money at all. Funds have seriously efficient Administrators.

    I invest directly myself and it is easy to see where the profits have come from by just checking the various indexes. I also have an accumulation fund just left to run.

    Yes there is risk and it can be contained through diversification, withdrawing some profits to cash for a buffer and rebalancing. All of which a good superannuation fund will do. And a careful investor will use this strategy to contain risks.

    There will be good years and bad years and the only mistake is panicking and selling at the bottom of a correction.

    Those who did this in 2009 missed some of the great gains made since then. The S&P 500 has made over 80% in the last 4 years for example. Better even than Sydney property.
    MICK
    20th Jul 2017
    5:05pm
    Rae: if a government nationalises super in the future it will then have control of your money. What do you suggest they are going to do? Keep their hands off it? We all know better than that.
    *Imagine*
    20th Jul 2017
    7:10pm
    I am interested to know where you got your figures from Rae. I looked up the S&P top 200 in AUS. This time 4yrs ago it was just on 5000. Today the value is about 5800. That is a rise of 800 points or 16% in 4yrs. A rise of 80% from 5000 would take us to a value of 9000. I have an imagination but I think that your planet would be more fun than mine.
    Rae
    21st Jul 2017
    8:55am
    No MICK my investments are not all in superannuation. I invest outside the super system directly. I have no faith in Government at all. They cannot be trusted in my experience. I also wanted the freedom after dreadful losses from the fiasco during the late 80s/90s.

    I read the figures for the S&P500 in a Strategic Intellinger(sic) Article a few days ago, not an AUS index but a world index of the top 500 corporations. I was surprised too. Of course a lot of that gain has been currency pick ups as the $AU fell from $1.09. The return was 16.9% last year. My overall portfolio is doing well now but I expect it too slow as the Central Banks stop dumping trillions into asset markets. Then again they may just keep printing and buying up debt. Who knows?

    Buying international shares with very high $AU after the correction was not too hard a decision.
    ex PS
    21st Jul 2017
    4:36pm
    The government will use stealth in order to grab retirees money, why do you think they keep bringing up taking Super balances once the remaining spouse is dead, not allowing lump sum withdrawals from funds and including the home in the assets test to a greater extent than it is now.
    The government sees the billions that are stowed away in Super and it is salivating, it will find a way to get its hands on that money.
    International shares are high risk, but mine made around 25% through my Super Fund, I just don't count on making that sort of money every year and am prepared for the year it makes a loss. That will not matter too much as I take the profits as they are made so I can only take a loss on the initial investment. I can do this because it is only a small portion of my investment strategy.
    Rae
    23rd Jul 2017
    8:03am
    Exactly so ex PS. It isn't that hard to keep an eye on events, hold a set portfolio and take profits either directly or through rebalancing.
    There are always down years and the panic that goes on when markets correct is when people lose capital. I keep mine out of the superannuation system purely through a need for freedom and to avoid the constant government changes. I save fees and charges and will gladly pay tax on any earnings above the threshold.

    I don't consider International shares any riskier than the ASX or property. In fact holding direct property in a super fund seems quite risky in my opinion with those draw down rules requiring ample cash back up.
    Lark Force
    20th Jul 2017
    11:42am
    This list of top performers could be inaccurate. My super made up of Australian Shares returned 15%, International Shares 17.14% and Growth 13.5% in my Super and its not even in the list of top performers. Who were they surveying? Is this a paid for article? I won't be changing to any of these "top" performers.
    Retired Knowall
    20th Jul 2017
    12:15pm
    It's a Flawed list as some were returns from Balanced funds and some from Growth funds.
    It's like comparing Apples with pineapples, totally useless but typical of this site.
    Retired Knowall
    20th Jul 2017
    12:20pm
    As an example, REST Growth fund delivered 15.35% and their Balanced fund delivered 10.5%. So go figure the relevance of this article.
    Pamiea
    20th Jul 2017
    12:13pm
    hey Muzza what's the name of your super fund??
    Lark Force
    20th Jul 2017
    1:41pm
    Naming the Fund might compromise my anonymity.
    Annualised investment returns to 30 Jun 2017 and previous yrs.
    Investment options
    12 months
    3 years
    5 years
    7 years
    10 years
    Left to Right 1yr to 10 yrs
    Growth 13.50% 8.16% 12.30% 9.97% 4.94% 7.72%
    Balanced 11.44% 7.48% 10.95% 9.27% 5.41% 7.66%
    Defensive Growth 9.84% 7.68% 9.50% 8.98% - 8.98%
    Conservative 7.31% 6.00% 7.77% 7.26% 5.49% 6.20%
    Diversified Income 10.03% 6.90% 9.20% - - 9.20%
    International Shares 17.14% 9.42% 14.50% 10.85% 5.15% 5.35%
    Australian Shares 15.61% 6.86% 11.74% 9.65% 4.72% 8.78%
    Property 10.07% 11.39% 11.19% 10.23% 1.87% 6.13%
    Fixed Interest 2.70% 3.75% 4.29% 5.04% 4.90% 4.83%
    Cash 1.92% 2.16% 2.46% 2.95% 3.42% 4.02%
    LiveItUp
    25th Jul 2017
    9:29am
    Does your statement agrees with these returns? Have younworked it out? I have found many statement don't work out any where near the published returns.
    johnp
    20th Jul 2017
    12:18pm
    I believe most of top performing funds are the industry super funds but i maybe wrong there ??So comments appreciated. Also, does the ATO allow an SMSF to be wound up (dissolved) and funds transferred to a super fund manager (whether retail or industry). That is so the amount does not have to exit super environment and reenter ??
    Kane Jiang Retirement Planner
    20th Jul 2017
    2:40pm
    Hi JohnP, the subject of "top performing funds" is a huge discussion in itself. Happy to discuss one day if you wish.

    And yes, SMSF can be wound up and you can transfer the funds back into an industry super. A lot of care and consideration are required before you do this.

    If you wish to discuss further you can call me on (08) 6258 5610, or email me at

    kane@aafinancialplanning.com.au

    20th Jul 2017
    2:14pm
    Yes if only all Australians saved more into super , they would be less reliance on the pension
    Money feed up to be utilized Into more productive outcomes for everyone
    Rae
    20th Jul 2017
    3:51pm
    Yes Raphael and once wages catch up again with the growing cost of living people may very well be able to do this.

    Stagnating and falling wages make everything harder for working people.

    I personally believe those earning over $60 000 net should be able to save more.

    The median wage is around $43000 so over half of workers can't afford more savings. A clearer picture would emerge if very high incomes were removed from the statistics.One person earning$19 million certainly raises the average wage statistics and there are thousands of them.

    Another very big problem is the fact that only PAYG workers are required to have a super account.

    There must be millions of business people who have no super fund at all. Relying instead on property and negative gearing.
    Anonymous
    21st Jul 2017
    1:19am
    Another problem is that poorer paid workers get little or no tax concession to save in super, while the well-off get massive benefit from tax concessions to build big retirement funds. It's a crazy back-to-front notion that makes it impossible for vast numbers of workers to save anywhere near enough for retirement, while the wealthy can save enough to live in luxury. It's been confirmed that tax concessions on super cost the nation far more than the total cost of the old age pension, yet everyone seems to want to give the rich more by cutting the pension, and of course the ''holier than though'' affluent then claim people who need the pension were ''lazy'' or ''irresponsible'' and deserve their late-life hardship. (True in some cases, of course, but certainly not fair as a generalization.)

    Now there's a call to cut the cost of pensions by bashing up homeowners who can't fund their own retirement - including the home in the assets test and making the pension a debt out of a pensioner's estate. Soon there will be no point in anybody who can't achieve considerable affluence bothering to strive at all!

    If the nation pandied less to the greed of the well-off and focused more on supporting and encouraging lower-paid workers to accrue savings, they might be ABLE to put more into super and rely less on pensions. I'm sure most workers want to a comfortable retirement, but they also want a roof over their heads and food on the table today - and to be able to give their kids a reasonable start in life.
    Rae
    21st Jul 2017
    9:49am
    Yes Rainey. Wages need to catch up and a better share of productivity and profit gains given to labour. No doubt about it.
    Central Bankers have tried but the money has gone into assets instead of the real economy.

    I think your problem with higher paid individuals a bit overdone.
    I never was one but I know people paid insane amounts for what they do. They pay crazy levels of tax as well.

    Many live quite frugally most of the time saving and investing.Hard to pick them out in a crowd.

    They may update homes into bigger and better as it seems a National pastime to avoid tax. A lot of the affluence I see is bought using debt.
    We have spent $2 trillion dollars of future money on today's fripperies and it will have to be paid back sooner or later.

    It is a good thing some savings are being forced on people in the form of superannuation.

    The lower paid workers should not be required to pay the 15% super taxes in my opinion. Tax concessions for the wealthy is to encourage them to use the super system at all. Most of them don't have to as they are self employed and not required by legislation to use super at all. Yet another example of the current unfairness I suppose.

    These same people own very expensive homes but have no super and get the OAP under current rules.

    The whole thing is a dog's breakfast of mismanagement really.

    I don't think it's entirely greed or pandering going on. Some will always be richer. Being envious of their luck, enterprise or management achieves nothing.
    Jacky
    20th Jul 2017
    2:34pm
    My superannuation is with Colonial and it has not done very well, as advised because of my age there is a fair amount in cash. I think I need to change this so I can make more money because I am going to need it.
    Kane Jiang Retirement Planner
    20th Jul 2017
    2:43pm
    Not sure what the source of the above is, and whether the source also take retail funds into consideration. Most of the ones above are industry funds.

    Muzza is also right, comparison is not apple to apple (and maybe because there is no way to compare apple to apple).

    It is hard to measure retail funds and SMSF performance too, as everyone's portfolios are different.
    Old Geezer
    21st Jul 2017
    12:41pm
    All I'll say is that many SMSFs have done a lot better than these returns.
    ex PS
    21st Jul 2017
    4:23pm
    Yes they have but many have not, if you don't know what you are doing, stay away from SMSF's. As as been proved, you can do quite well with an established fund.
    Old Geezer
    21st Jul 2017
    5:58pm
    I wouldn't have super if I had to have anything but a SMSF myself.

    It would be interesting to see how those returns compare with SMSFs as many I know of have done better.
    ex PS
    22nd Jul 2017
    9:47am
    I would too, just as long as all SMSF's are included meaning the successful and the unsuccessful. I would also like to see the costs of running each type of fund compared.
    I looked at these types of Super Funds before retiring and found that the costs of each scheme are similar and projected returns for schemes within the investor risk profile I chose were not substantial enough to bother with a SMSF. I have been retired on my Q-Super Pension Fund for 6 years now, spent a bit on setting up my lifestyle and anticipate living quite comfortably on what it is earning for the next 15 at least.
    I would have stretched it out further but this governments obvious ambitions to rip retirees off has made me think that it is better to live the high life now and get a Pension when my money runs out.
    LiveItUp
    25th Jul 2017
    9:19am
    Problem with super funds other than SMSFs is that all their costs are not transparent. So the normal people comparing the two are not comparing apples with apples at all. With other funds you may have to pay to put your money in, then you pay someone to invest the money, then the fund manager where the money invested is paid, then you have to pay the people who manage the money etc which can add up to 5% and in most cases a lot more of your money taken out each year but just looking at them most of these fees are not transparent. To make things worse some funds give their returns before these expenses which make no sense when you try and compare them with statements. I recently seen a statement fronm one of those top performing funds and that person had lost money over the last year.

    I couldn't work out why my super fund was going no where years ago whereas I was making a very decent return on my own money. Since setting uo my SMSF I now know why.

    The total fees and expenses on my SMSF fund are less than 0.25%.
    Blossom
    21st Jul 2017
    6:07am
    Will that cover the huge losses from a few years ago when some people who had low balances lost thousands?
    Retired Knowall
    21st Jul 2017
    7:34am
    Yes it has, mine has made over 12% on the bottom of the GFC.
    ex PS
    21st Jul 2017
    4:41pm
    Most of those who did not panic and cash out seem to have recouped all they lost and more, I can only speak for the more regulated funds of course, like those run for the Public Service and other Industry Funds.
    I have noted that those with Union and Staff representatives on the board seem to have done well.
    LiveItUp
    25th Jul 2017
    9:21am
    I'm actually a lot better off today than before the GFC. So the GFC was a good thing not a bad thing at all.
    Blossom
    21st Jul 2017
    6:10am
    Maybe the banks will be happy to help more young ones buy houses, not query the value when it is bought at council rate value...simply there hasn't been any comparable houses sold in the area for over 10 years. Most people would be looking at selling a house that's less than 20 years old.
    GrayComputing
    21st Jul 2017
    9:00am
    Do not leap with joy until you actually retire.
    My age group lost 50% or more and we were still being charged (like MLC) thousands of dollars a year to help it go further down.
    Most super funds are robber barons and advisors their henchman.
    BE AWARE.
    Rae
    21st Jul 2017
    10:03am
    I looked at MLC years ten 12 years ago and was appalled at the fees and charges.

    I also had a whole of life policy with them that was "guaranteed " to return $80 000 that made $23000 at maturity.

    They will promise the world and fail to deliver in my opinion.

    The reputable Industry Funds , not for profit model seems to do better.

    21st Jul 2017
    5:24pm
    90% of all Australians starting out now should have at least $1m in their super after 30 years with both partners working
    No excuse