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Super funds defy previous losses with strong returns in 2023

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Super funds delivered strong returns for members over 2023, boosted by a share rally in the final quarter of the calendar year, according to the latest estimates from SuperRatings.

Research house SuperRatings has estimated that the median balanced superannuation option delivered a 2.7 per cent return in December, and 9.6 per cent for the full 2023 calendar year.

This result fully recovered the -4.8 per cent loss from the previous year.

The median growth option returned 3 per cent in December and 11 per cent over the year, while a smaller allocation to shares resulted in the median capital stable option returning 2 per cent for the month and 6.5 per cent across the year.

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According to SuperRatings, international shares have emerged as the top performers of the year, driven by robust growth in the technology sector. Strong support for returns also came from Australian shares, while rising cash rates enhanced fixed interest and cash returns.

Looking at the individual funds, the ratings agency revealed that the highest SuperRatings Balanced Index returns over the year was 13.2 per cent for members in the Hostplus – Indexed Balanced option, closely followed by Brighter Super Optimiser Accumulation - Multi-Manager Growth Fund returning 13.1 per cent, while ESSSuper – Balanced Growth completed the top three, returning 12.8 per cent.

In fourth place on SuperRatings’ list was CFS-FC Wholesale Personal – CFS Enhanced Index Balance with yearly growth of 11.9 per cent, followed by Vision Super Balanced Growth with 11.7 per cent, and IOOF Employer Super Core MLC MultiSeries 70 with 11.4 per cent.

Aware Super’s Future Saver Balanced came in seventh with growth of 11 per cent, followed by GESB Super My GESB Super Plan with 10.7 per cent, and TWUSuper – Balanced with 10.6 per cent. The top ten were rounded out by HESTA with its Balanced Growth option adding 10.5 per cent.

Over the long term, the Hostplus – Balanced option secured the lead with an impressive average annual return of 8.3 per cent, the only fund in SuperRatings’ index to consistently exceed an 8 per cent annual return over the past 10 years.

In its forward estimate, the ratings agency said that while it sees inflation slowing into 2024, as the impact of the interest rate rises throughout 2023 softens consumer demand, it expects to see continued ups and downs, as markets remain sensitive to local and global events.

SuperRatings executive director Kirby Rappell said, “Members are likely pleased with this year’s performance, with most seeing a full recovery from last year’s losses”.

“Long-term strategy and high levels of diversification continue to result in impressive long-term performance by those managing our retirement savings.

“As we look ahead to what 2024 might bring for super fund returns, ongoing uncertainty means it remains important to set a strategy and stick with it despite the potential for periods of falling balances.”

Super funds defy previous losses with strong returns in 2023

Super funds delivered strong returns for members over 2023, boosted by a share rally in the final quarter of the calendar year, according to the latest estimates from SuperRatings.

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Maja Garaca Djurdjevic

Maja Garaca Djurdjevic

Maja's career in journalism spans well over a decade across finance, business and politics. Now an experienced editor and reporter across all elements of the financial services sector, prior to joining Momentum Media, Maja reported for several established news outlets in Southeast Europe, scrutinising key processes in post-conflict societies.

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