The funds both posted strong returns over FY2024–25, attributed to long-term strategies and diversified portfolios amid persistent market volatility.
The strong results from both funds align with broader trends across the superannuation sector. SuperRatings estimated the median balanced option returned 10.1 per cent in FY24–25, driven by early-year momentum before a spike in volatility.
Namely, Brighter Super’s MySuper option returned 10.89 per cent, exceeding its three, five, and 10-year averages.
Several of its accumulation and pension options also recorded double-digit returns, with Indexed Balanced (12.21 per cent) and Growth (11.65 per cent) leading among accumulation options and Indexed Balanced (13.63 per cent) and Growth (12.82 per cent) topping pension returns.
Brighter Super’s chief investment officer (CIO), Mark Rider, said these outcomes were fortified by strong returns in global and domestic equities.
“We’re encouraged by the strength of returns over the past year across all of our diversified investment options and, more recently, the recovery since the volatility sparked by the US trade tariff announcements,” Rider said.
“Our long-term strategy, which combines active management with broad diversification, is designed to navigate changing market conditions and protect members’ retirement savings and grow over the long-term.”
Rider also reaffirmed the fund’s commitment to outsourcing investment management, stating that it’s Brighter Super’s view that “while there’s been additional scale benefits from the merger” undertaken, the fund doesn’t see that there’s a competitive advantage to actually insource.
“We see the best way to do that is by partnering with investment managers,” Rider added, pointing to the fund’s strategy of working with external specialists to maintain agility and access niche opportunities.
Meanwhile, Mercer Super’s default investment option, Mercer SmartPath, returned between 12.3 per cent and 12.6 per cent for members aged 18 to 52, despite geopolitical uncertainty and market swings.
Mercer Super’s CIO, Graeme Miller, said the fund managed to deliver a “solid outcome” over the financial year despite geopolitical headwinds driving market volatility.
“This should give members confidence as we manage the challenges to come.”
Miller noted the fund had moderately reduced equity exposure in response to near-term risks but stayed the course with its long-term strategy.
“We remained confident in our long-term strategy, drawn from our global research capabilities, and did not make any changes to our strategic allocations,” he said.
“As we look ahead and with a view of super as a long-term investment, we’ll continue to focus on having well-diversified investment portfolios that are prudently managed across many different countries, industries and investment types to support portfolio resilience in an uncertain economic environment.”
Last week, AMP chief economist Shane Oliver cautioned that while funds have broadly had a successful 2024–25, there are no guarantees this rally will be sustained.
“Markets have once again defied expectations,” he said, but warned of potential downside ahead, forecasting returns to fall to between 6 and 7 per cent over the next year as global risks intensify.
