Australian Superannuation Funds See Stellar Returns in 2024

Members of Australia's top-performing superannuation funds have gained a stellar boost to their retirement savings accounts.

Chant West research shows the growth option for UniSuper, Colonial FirstChoice and Mine Super topped the list for superannuation fund members in 2024, returning 14.7, 13.6 and 13.4 per cent respectively.

Chant West senior investment research manager Mano Mohankumar said the latest figures highlight the stellar results in 2024 following a strong 2023.

"With share markets performing so strongly in 2024, particularly international shares, it's not surprising that the better performing super funds generally had higher allocations to those asset classes," he said.

"Funds that had lower allocations to unlisted property, cash and bonds would have also benefited. Having a higher exposure to foreign currency would have also helped."

Overall, it was a strong year for superannuation funds, with the median growth fund returning 11.4 per cent to Aussies.

Chant West said those in a higher risk option could have done even better throughout the year.

This comes off the back of a strong run, including gains of 9.9 per cent in 2023 and 12 of the last 13 years being positive.

"International shares in unhedged terms returned even more, with a staggering 31.2 per cent gain due to the depreciation of the Australian dollar over the year. On average, growth funds have 30 per cent in total invested in international shares and 25 per cent allocated to Australian shares," Mr Mohankumar said.

He said that while super funds had a particularly strong 2024, the returns shouldn't be thought of as the norm for members.

"The typical long-term return objective for growth funds is to beat inflation by 3.5 per cent per year, which translates to just over 6 per cent per annum," Mr Mohankumar said.

"Returns are important but so is risk, and most funds also set themselves a risk objective. Risk is normally expressed as the likelihood of a negative annual return, and typically a growth fund would aim to post no more than one negative return in five years on average."

Separate research from SuperRatings found that $100,000 invested in the median growth fund 15 years ago would today be worth $307,519.

Meanwhile, those in the median balanced option would have seen the same $100,000 investment grow to $280,000 compared with holding cash, which today would be worth $141,117.

SuperRatings executive director Kirby Rappell said superannuation funds were able to deliver strong returns in an uncertain market, with 2025 likely to be the same.

"With a strong double-digit return for most funds, members can be reassured their retirement savings continue to grow," Mr Rappell said.

"However, 2025 could bring many potential pitfalls and sticking to a long-term strategy is important should we start to see balances falling. High levels of diversification continue to insulate members over time, resulting in impressive long-term performance by those managing our retirement savings."

Mr Mohankumar reminded superannuation members that was is a long-term investment.

The Hostplus balanced option is the top performer over the last 10 years, with an average return of 8.4 per cent.

Australian Retirement Trust's balanced option is second at 8.3 per cent, and AustralianSuper's balanced option is third with 8.1 per cent.