After only reporting a modest 0.2 per cent return for the median balanced option in October, the research house said that November saw gains led by the strong performance of international shares, particularly in the US, following the outcome of the US presidential election.
“Share exposure continued to drive super returns in November. Members invested in options with higher exposure to shares benefited from the strength of the market,” SuperRatings executive director Kirby Rappell said.
Speaking to InvestorDaily, Rappell noted the strong momentum that the market appears to be carrying into the end of the year, suggesting a strong start to 2025.
“However, US valuations are at historical highs and inflation remains front of mind for many. The main risk remains some form of external shock or trace back of the tech rally,” he said.
“The markets and, indeed, geopolitics can change quickly, with the fall of the Assad regime another good example of the change we have seen this year.”
As such, SuperRatings doesn’t expect the market to sustain its current pace and is centring its estimates around long-term outcomes.
Nonetheless, Rappell said that 2024 has been a stronger year for members than anticipated.
“Total superannuation balances have now topped $4 trillion as at the end of September and so far, April is the only month where funds haven’t provided a positive return to members invested in the median balanced option,” he said.
The median growth option grew by an estimated 2.8 per cent in November, while the median capital stable option, with limited exposure to international shares, grew a more modest 1.4 per cent.
Moreover, pension returns saw a similar result, with the median balanced pension option increasing by an estimated 2.7 per cent.
The median capital stable pension option, meanwhile, was estimated to rise 1.5 per cent over the month, while the median growth pension option rose by some 3.1 per cent.
Rappel highlighted that November’s gains pushed the calendar year return into double digits, with the median balanced accumulation product estimated to return 11.4 per cent for the first 11 months of 2024.
“For pension members, the median balanced pension product is estimated to return 12.8 per cent for the 11 months to 30 November 2024” he said.
As members near the end of the year, Rappel said they will be pleased to see their balances continuing to grow.
“Funds have delivered an estimated 6.7 per cent annual return over the past 24 calendar years. While there are areas of clear improvement remaining for super funds, it remains reassuring that returns have remained competitive.”
