John Pearce, CIO at UniSuper, did his best to temper member expectations earlier this year when he declared “we are going to muddle through”.
“In February, I made the point that we have had two really strong years, anything above a flat return would be a bonus, and it’s pretty much my thinking still,” Pearce said in May.
However, just a couple of months later, UniSuper has reported a return of 10.3 per cent for its default Balanced option – surpassing last year’s 9.2 per cent – alongside growth of 11 per cent for its Growth option in FY2024–25.
“Our two sustainable branded options, Sustainable High Growth and Sustainable Balanced, returned 12.3 per cent and 11.2 per cent, respectively,” the fund said in a brief statement on Thursday.
Its highest performing investment option was the Australian Dividend Income option at 18.4 per cent, which is both designed and managed by the fund’s in-house investments team.
“We’re very pleased to deliver these returns to our members over a tough year, building on our record of strong long-term returns. UniSuper continues to focus on investing in quality assets, adding further diversification for our members and ensuring our portfolios are well positioned for the long term,” Pearce is quoted as saying.
Back in May, Pearce was less confident in UniSuper’s ability to deliver given the impacts of US President Donald Trump’s “Liberation Day” tariffs, their reversal, and the prolonged scuffle between the US and China.
“Given that we’re coming off two very strong years, I think that’s not a bad result, but we have got a fair way to go in this year yet,” he said at the time.
Sharing that he once believed in “American corporate exceptionalism”, Pearce said that Trump “is turning out to be horrible for business”.
“The biggest threat to American corporate exceptionalism is indeed Donald Trump,” he said.
“Like every other fund, we are questioning our exposure to the US. It would be fair to say that we’ve hit peak exposure and will be reducing over time.”
Despite brief fears that even saw BlackRock doubt US equities, Australian super funds delivered a third consecutive year of strong performance, with the median balanced option returning an estimated 10.1 per cent in FY24–25.
But data from SuperRatings did show that while super funds delivered a strong 8 per cent return in the first seven months of FY24–25, performance plunged to just 0.8 per cent following Trump’s “Liberation Day” announcement, before rebounding sharply to finish the year above 10 per cent, buoyed by resilient sharemarkets.
Looking ahead, the chief economist at AMP recently flagged several risks that could test market resilience, as a result of which he expects returns to come in around 6–7 per cent over the next 12 months.
