Chant West is forecasting a “healthy” return for super funds this year, despite them slipping into negative territory in November.
Although super funds ended a seven-month streak of gains in November, falling 0.4 per cent according to data, the firm said that with less than two weeks remaining in the year, expected median growth fund returns still appear strong.
It is now expecting the annual returns to come in at 8.5 per cent.
Commenting on the results, the firm’s head of superannuation investment, Mano Mohankumar, argued that given this year’s macroeconomic and geopolitical uncertainty, the estimated 8.5 per cent median return is an excellent outcome.
“International share markets, which account for just over 30 per cent of growth fund allocations on average, have been the primary driver of the strong CY25 performance to date, delivering over 17 per cent so far this year.
“It’s also helped that all major asset classes have produced positive returns for the year to date,” Mohankumar said.
He added that given the strength of international share markets, super fund members invested in higher-risk portfolios would likely have seen even stronger returns.
SuperRating’s director, Kirby Rappell has similarly argued that while the reversal to negative returns was disappointing this month, 2025 is still expected to be above average for annual returns.
Meanwhile, noting the strong returns in 2023 and 2024 of 9.9 per cent and 11.4 per cent respectively, Mohankumar argued that it’s important to recognise that total gains over the past three years now amount to around 33 per cent.
“While the calendar year performance often attracts the most attention at this time of year, it’s important to remember that long-term performance remains the key measure for super outcomes,” Mohankumar said.
He described super fund returns as a long-term success story ever since the introduction of compulsory super in July 1992, arguing that performance is best assessed over 10-year periods – a timeframe consistent with the long-term nature of superannuation.
According to Chant West’s data, the historical performance of the median growth fund since the introduction of compulsory super in July 1992 has returned 8 per cent per annum.
Meanwhile, annual CPI increase over the same period has averaged 2.7 per cent, delivering a real return of about 5.3 per cent per annum – well above the typical 3.5 per cent target.
Looking at the past 20 years alone, Mohankumar maintained that super funds continued to return more than their objective at 7 per cent per annum. As the firm explained, this remained true even though the period included three major market downturns: the GFC, COVID-19, and the high inflation and interest rate environment of 2022.
While the 10-year return objective was not met between mid-2008 and late-2017 due to the impact of the GFC, Mohankumar reiterated that outside of this window, the median growth fund has also exceeded its objective across rolling 10-year periods.
Finally, on risk, the firm found that median performance to the end of November 2025 across traditional diversified risk categories has broadly met long-term return objectives. This held across categories ranging from All Growth to Conservative.
“On the risk side, there have only been five negative years over the entire period, which translates to less than one year in every six. Again, funds have done better than their typical long-term risk objective, which is one negative return in every five years, on average,” Mohankumar concluded.
