Only three of Australia’s major superannuation funds managed to improve on last year’s investment performance, with AustralianSuper, UniSuper and Rest bucking the broader trend amid a year of geopolitical uncertainty and market volatility.
With the majority of funds now having reported their FY25-26 returns, AustralianSuper strengthened performance across both its Balanced and High Growth options.
The fund is Australia’s largest superannuation fund with $410 billion in assets and over 3.6 million members.
The fund’s Balanced option increased to 9.7 per cent from 9.5 per cent a year earlier, while its High Growth option climbed to 11.5 per cent from 10.6 per cent.
CIO Shaun Manuell said the result reflected the fund’s long-term investment approach despite a challenging backdrop.
“This is a strong result and a great outcome for members. Strong long-term performance is what makes the biggest difference to members in retirement.”
AustralianSuper said listed equities, including artificial intelligence-related investments, alongside private equity and private credit were among the strongest contributors to returns.
“Artificial intelligence continued to be a major driver of global markets, with large-scale investment supporting growth and earnings across a widening group of companies. Listed equities were again among the strongest performing asset classes for AustralianSuper, with international and Australian shares benefiting from corporate earnings strength, technology investment and resilient investor sentiment.
“Importantly, as the AI cycle matures, we are seeing the benefits broaden beyond US technology stocks and into different regions, sectors and asset classes. That has supported our active investment approach and the benefits of diversification.”
UniSuper also built on its previous year’s performance, with its Balanced option improving to 10.4 per cent from 10.34 per cent, while its High Growth option delivered one of the strongest returns reported across the sector at 13.1 per cent, up from 11.5 per cent.
The fund’s CIO John Pearce said the fund had delivered the result despite market turbulence.
“We’re very pleased to deliver these returns despite the market turmoil of the past year.
“During the year UniSuper made significant investments in high quality assets in private markets and direct property, adding further diversification for our members.”
Rest rounded out the trio, lifting its High Growth option slightly from 11.6 per cent to 11.7 per cent while maintaining its Growth option return of 9.8 per cent for a second consecutive year.
Rest CIO Michael Clancy said resilient overseas equity markets and private market investments had supported another year of strong returns.
“I’m pleased we’ve continued to deliver such strong investment returns over the past 12 months for Rest’s more than two million members. The Growth option’s return of 9.81 per cent means a Rest member with $50,000 in their super account would have added around $4,900 in investment earnings to their balance over the year.”
He added that markets continued to be shaped by both cyclical pressures and structural themes.
“Markets are being buffeted by short-term cyclical changes, such as oil price movements and interest rate cycles, and long-term structural changes, such as geopolitical forces and step-change AI productivity opportunities and disruptions.”
While the three funds managed to improve on last year’s performance, Russell Investments told Investor Daily’s sister-brand Super Review earlier this year that fund members should be cautious about expecting double-digit returns to become the norm.
Head of investments, superannuation Tim Cook said the strong performance seen across the sector over recent years had largely been driven by global equities and was unlikely to persist indefinitely.
“What we’ve seen over that period of time is some very strong growth, and that … leads you to think that that’s just the norm now,” Cook said. “That is not the norm.”
Cook said Russell Investments’ long-term outlook suggests high-growth portfolios are more likely to deliver returns of around 8 to 9 per cent over time as markets normalise, adding that members should focus on achieving appropriate long-term retirement outcomes rather than expecting recent performance to continue.
