Super funds had a strong September with the median growth fund (61 to 80 per cent in growth assets) up 1.2 per cent for the month, according to Chant West.
That propelled the return over the first nine months of CY24 to an impressive 8.6 per cent per cent. Given the strength of share markets this year, higher risk categories have fared even better so far.
Chant West senior investment research manager Mano Mohankumar said that with 25 per cent and 30 per cent allocated to Australian shares and international shares, respectively, those asset classes remain the primary drivers of growth fund performance.
MySuper products have been operating for just under 11 years, so when considering performance, Mohankumar said it’s important to remember that super is a much longer-term proposition.
He said since the introduction of compulsory super in July 1992, the median growth fund has returned 8 per cent a year. The annual CPI increase over the same period is 2.7 per cent, giving a real return of 5.3 per cent a year – well above the typical 3.5 per cent target.
Mohankumar said the past 20 years includes three major share market downturns – the GFC in 2007-2009, Covid-19 in 2020, and the high inflation and rising interest rates in 2022 – and super funds have returned 7.4 per cent a year, which is still comfortably ahead of the typical objective.
