A small pension organisation that few outside its members have heard of was the best-performing pension fund in the 2023-2024 financial year.
Mine Super, which as its name suggests caters to coal miners and other high-risk occupations, topped research firm Chant West’s annual list for the second year running, with growth of 10.7 per cent.
Joining it in the top spot are retail super funds Colonial First State and Insignia, with three other funds in the top 10 also up more than 10 per cent.
Chant West said: “Despite the uncertain economic and geopolitical backdrop, super funds have recorded another excellent financial year.”
The median across all funds was 9.1 per cent for their growth options, which are investment options with 61-80 per cent in growth assets, and the majority of MySuper default options fall into this category.
“International stocks were the biggest contributors, rising 21.5 per cent over the year, led by a strong performance in the technology sector,” said Mano Mohankumar, senior investment research manager at Chant West.
“Not surprisingly, the best-performing pension funds generally had higher allocations to those asset classes.”
While not quite at the same levels, Australian stocks also had a healthy year, returning 11.9 percent.
A small pension organisation that few outside its members have heard of was the best-performing pension fund in the 2023-2024 financial year. File image
International stocks rose 21.5 percent over the year. File image of the Australian currency
Mr Mohankumar said all asset classes were in positive territory for the year, except unlisted property (not listed on an exchange such as the ASX), which is struggling with falling valuations for office and retail real estate following the pandemic.
The 10 best-performing growth funds over the decade to 30 June 2024 were all industry super funds, which are managed to benefit their members, not the interests of outside shareholders.
Retail funds, which return profits to shareholders, performed well over the past two years, but industrial funds offered better long-term growth, Chant West found.
Mr Mohankumar said clients should consider long-term returns rather than short-term returns, as superannuation is an investment for retirement.
However, he warned that an average return of 9.1 percent “should not be considered normal” and that last year had been very good.
The average return of most pension funds is usually between 3 and 4 percent plus the CPI over 10 years, which is equivalent to around 6 percent per year.
The 2023-2024 financial year was the 13th positive return in the last 15 years.
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