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Strong super fund returns continue in new financial year

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Super funds have kicked off the new financial year on a positive note.

The latest data from research house SuperRatings has revealed that the median balanced superannuation option delivered an estimated return of 1.5 per cent during the month of July.

SuperRatings said that funds had continued to build on the momentum observed in the final quarter of the 2023 financial year which included a 1.2 per cent return in June.

“The impact of inflation continues to drive markets with most Australian and global equities delivering modest returns, while energy and commodities performed well over July,” the firm said.

“We expect returns will remain bumpy over the short term, despite the Reserve Bank of Australia taking a wait and see approach in both July and August following indications that the tightening cycle is beginning to have a clearer impact on spending and consumption.”

According to the research house’s estimates, the median growth option rose by 1.8 per cent in July, while the median capital stable option lifted by 0.8 per cent.

Over the past calendar year, the median balanced option was up by 7.2 per cent, the median growth option was up 9.2 per cent, and the median capital stable option was up 3.6 per cent.

“Funds have had a strong finish to FY23 with the median balanced fund returning 9.1 per cent over the year to June and it is pleasing to see funds maintaining that momentum into the first month of FY24,” commented SuperRatings executive director Kirby Rappell.

Looking further back, the median balanced option delivered an average annual return of 7.8 per cent over three years, 5.9 per cent over five years, and 7.2 per cent over 10 years.

Meanwhile, the median growth option has generated an average annual return of 9.4 per cent over the past three years, 7.0 per cent over five years, and 8.5 per cent over 10 years.

Finally, the median capital stable option has had an average annual return of 3.2 per cent over three years, 3.1 per cent over five years, and 4.5 per cent over 10 years.

Last month, SuperRatings also reported that the top 10 balanced super funds of the 2023 financial year all achieved returns of more than 9.5 per cent.

ESSSuper’s Balanced Growth (formerly Basic Growth) option was Australia’s top-performing balanced fund with a return of 13.3 per cent in the 12 months to 30 June.

Vision Super’s Balanced Growth was the next best balanced option with a return of 11.0 per cent, followed by Brighter Super’s Balanced, which returned 10.6 per cent.

Double digit returns were also achieved by UniSuper’s Balanced (10.3 per cent), Equip MyFuture’s Balanced Growth (10.1 per cent), and Australian Retirement Trust’s Super Savings Balanced (10.0 per cent).

IOOF Employer Super Core’s IOOF MultiSeries 70 (9.8 per cent), Aware Super Future Saver’s Balanced (9.7 per cent), Mercer Super Trust’s Mercer Select Growth (9.6 per cent), and HESTA’s Balanced Growth (9.6 per cent) rounded out the top 10 balanced funds.

Jon Bragg

Jon Bragg

Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.