Super delivers best return in 20 years

2013 was an outstanding year for super funds, and especially those oriented to Australian and international shares. Resurgent share markets saw the median growth fund (61 to 80% invested in growth assets) return 17.5%, the best performance in the past 20 years and the second highest since the introduction of compulsory super in 1992. The top-performing fund for the year was REST Core, which returned 19.7%, while even the worst-performing fund in the category gained 11.3%.

Key highlights include:
– Funds have bounced back strongly from the depths of the GFC, and now stand about 21% above their pre-GFC high achieved in October 2007. They’ve gained an impressive 64% since the GFC low-point, which came at the end of February 2009.
– The great majority of Australian workers are in their employer’s default growth fund, so if they sat tight while the GFC came and went they will have emerged with their savings relatively unscathed.
– The funds that did best in 2013 were those that had significant investments in international shares and chose to have a lower portion of their foreign currency exposure hedged.
– Industry funds finished ahead of master trusts over the year, returning 17.4% versus 16.9%. They also hold the advantage over the longer term, having returned 7.4% per annum against 6.8% for master trusts over the ten years to December 2013 but the gap is narrowing.

Full Chant West analysis.