Super funds have emerged from the recent market downturn in top shape, recovering from a string of losses suffered in late 2018 as investors regained confidence and share markets were bolstered by a generally positive earnings season.
February’s median Balanced option return of 2.6% was the highest monthly return since July 2016, while the median Growth option did even better, returning 3.3% over the month. Highlighting the strength of the market rebound, the median Australian Shares option returned 5.4% over the month, outperforming the median International Shares option, which returned 4.2%.
This contrasts with performance at the end of 2018, which saw super funds hit by four consecutive months of negative returns. Following February’s performance, members invested in the median Balanced option are now fully recovered from last year’s market sell-off.
Median balanced option returns to 28 February 2019
Period
Accumulation returns
Pension returns
Month of February 2019
2.6%
3.0%
Financial year return to 28 February 2019
2.4%
2.9%
Rolling 1-year return to 28 February 2019
5.0%
5.6%
Rolling 3-year return to 28 February 2019
8.8%
9.6%
Rolling 5-year return to 28 February 2019
7.3%
7.6%
Rolling 7-year return to 28 February 2019
8.8%
9.6%
Rolling 10-year return to 28 February 2019
8.9%
10.0%
Rolling 15-year return to 28 February 2019
7.5%
8.3%
Rolling 20-year return to 28 February 2019
7.1%
8.0%
Interim results only. Median Balanced Option refers to ‘Balanced’ options with exposure to growth style assets of between 60% and 76%. Approximately 60% to 70% of Australians in our major funds are invested in their fund’s default investment option, which in most cases is the balanced investment option. Returns are net of investment fees, tax and implicit asset-based administration fees.
“Super fund performance over the last six months has been a great example of the sector’s resilience in challenging market conditions,” said SuperRatings Executive Director Kirby Rappell.
“Markets have generally reacted favourably to the recent round of earnings in Australia and the US, while trade tensions have eased and central banks have backed away from further tightening. But most participants expect volatility to return in the near future, meaning funds must remain focused on long-term performance.”
Growth in $100,000 invested over 10 years to 28 February 2019
Select index
Feb 2009: $100,000
Mar 2009: $102,240
Apr 2009: $105,363
May 2009: $106,428
Jun 2009: $106,992
Jul 2009: $110,865
Aug 2009: $114,318
Sep 2009: $117,233
Oct 2009: $116,002
Nov 2009: $117,521
Dec 2009: $120,098
Jan 2010: $117,492
Feb 2010: $118,475
Mar 2010: $121,911
Apr 2010: $121,811
May 2010: $118,737
Jun 2010: $117,273
Jul 2010: $119,620
Aug 2010: $119,150
Sep 2010: $121,819
Oct 2010: $123,449
Nov 2010: $123,230
Dec 2010: $125,308
Jan 2011: $126,548
Feb 2011: $127,927
Mar 2011: $128,362
Apr 2011: $128,549
May 2011: $128,221
Jun 2011: $127,375
Jul 2011: $125,614
Aug 2011: $123,307
Sep 2011: $121,073
Oct 2011: $124,436
Nov 2011: $123,177
Dec 2011: $123,043
Jan 2012: $125,854
Feb 2012: $128,113
Mar 2012: $130,025
Apr 2012: $130,415
May 2012: $127,553
Jun 2012: $127,873
Jul 2012: $129,247
Aug 2012: $131,367
Sep 2012: $133,308
Oct 2012: $134,443
Nov 2012: $135,160
Dec 2012: $137,749
Jan 2013: $141,277
Feb 2013: $144,032
Mar 2013: $143,765
Apr 2013: $146,667
May 2013: $147,679
Jun 2013: $146,786
Jul 2013: $151,251
Aug 2013: $151,918
Sep 2013: $153,944
Oct 2013: $156,664
Nov 2013: $157,893
Dec 2013: $160,167
Jan 2014: $158,812
Feb 2014: $162,134
Mar 2014: $161,559
Apr 2014: $162,726
May 2014: $164,441
Jun 2014: $164,737
Jul 2014: $166,747
Aug 2014: $168,191
Sep 2014: $167,187
Oct 2014: $169,236
Nov 2014: $170,498
Dec 2014: $172,488
Jan 2015: $175,816
Feb 2015: $181,028
Mar 2015: $182,116
Apr 2015: $181,568
May 2015: $183,327
Jun 2015: $179,624
Jul 2015: $183,791
Aug 2015: $178,429
Sep 2015: $176,651
Oct 2015: $181,930
Nov 2015: $181,341
Dec 2015: $181,636
Jan 2016: $177,540
Feb 2016: $176,661
Mar 2016: $179,682
Apr 2016: $182,144
May 2016: $186,306
Jun 2016: $184,443
Jul 2016: $189,333
Aug 2016: $189,876
Sep 2016: $189,962
Oct 2016: $188,518
Nov 2016: $190,716
Dec 2016: $194,817
Jan 2017: $194,602
Feb 2017: $196,743
Mar 2017: $199,674
Apr 2017: $202,453
May 2017: $203,412
Jun 2017: $203,453
Jul 2017: $203,554
Aug 2017: $204,770
Sep 2017: $206,684
Oct 2017: $211,373
Nov 2017: $214,024
Dec 2017: $215,287
Jan 2018: $217,095
Feb 2018: $216,675
Mar 2018: $215,105
Apr 2018: $218,586
May 2018: $219,390
Jun 2018: $222,330
Jul 2018: $224,672
Aug 2018: $226,966
Sep 2018: $226,802
Oct 2018: $219,869
Nov 2018: $218,528
Dec 2018: $216,015
Jan 2019: $221,328
Feb 2019: $227,149
$250,000
$200,000
$150,000
$100,000
$50,000
Feb 2010
Feb 2011
Feb 2012
Feb 2013
Feb 2014
Feb 2015
Feb 2016
Feb 2017
Feb 2018
Feb 2019
Source: SuperRatings
Interim results only
Source: SuperRatings
Interim results
The positive performance for super funds in February has helped to boost total balances over the ten-year period ending 28 February 2019, with $100,000 invested in the median Balanced option in February 2009 now worth $227,149. The median Growth option is worth $246,426 over the same period, while $100,000 invested in domestic and international shares ten-years ago is now worth $270,252 and $278,415 respectively. In contrast, $100,000 invested in the median Cash option ten years ago would only be worth $129,990 today.
Fund performance
Australia’s top-performing funds continue to deliver for members, with TelstraSuper’s top-ranking balanced option returning 9.7% per annum over the past 10 years, followed closely by industry funds QSuper and UniSuper.
Top performing Balanced (60-76) funds
Source: SuperRatings
The rankings show how tight competition is among Australia’s leading funds when it comes to long-term performance. Mr Rappell said the results highlight the need to ensure members continue to have a wide range of high-performing funds to choose from.
“If you look at the top 20 performing super funds, each of them have achieved an average return of over 9.0% per annum over 10 years,” said Mr Rappell. “Over time it is common to see movement up and down within the rankings, and this is good for members because it shows there is competition within the sector.”
Warnings: Past performance is not a reliable indicator of future performance. Any express or implied rating or advice presented in this document is limited to “General Advice” (as defined in the Corporations Act 2001(Cth)) and based solely on consideration of the merits of the superannuation or pension financial product(s) alone, without taking into account the objectives, financial situation or particular needs (‘financial circumstances’) of any particular person. Before making an investment decision based on the rating(s) or advice, the reader must consider whether it is personally appropriate in light of his or her financial circumstances, or should seek independent financial advice on its appropriateness.
If SuperRatings advice relates to the acquisition or possible acquisition of particular financial product(s), the reader should obtain and consider the Product Disclosure Statement for each superannuation or pension financial product before making any decision about whether to acquire a financial product. SuperRatings’ research process relies upon the participation of the superannuation fund or product issuer(s). Should the superannuation fund or product issuer(s) no longer be an active participant in SuperRatings research process, SuperRatings reserves the right to withdraw the rating and document at any time and discontinue future coverage of the superannuation and pension financial product(s).
This media release is subject to the copyright of SuperRatings. Except for the temporary copy held in a computer’s cache and a single permanent copy for your personal reference or other than as permitted under the Copyright Act 1968 (Cth.), no part of this media release may, in any form or by any means (electronic, mechanical, micro-copying, photocopying, recording or otherwise), be reproduced, stored or transmitted without the prior written permission of SuperRatings. This media release may also contain third party supplied material that is subject to copyright. Any such material is the intellectual property of that third party or its content providers. The same restrictions applying above to SuperRatings copyrighted material, applies to such third party content.
17 Jul 2019 - Super funds have had a convincing finish to what was a bumpy 2019 financial year, with an improvement in sentiment and a rallying share market in June ...
Super’s trillion dollar decade, but members must be wary of risks
15 May 2019 - Super funds have failed to be rattled by the softening economic outlook, delivering solid returns in April and boosted by market momentum through early May. ...
17 Apr 2019 - Despite a recovery in the March quarter, superannuation funds are heading for a disappointing 2018-19 financial year, with global growth challenges and a ...
