Eight superannuation funds delivered returns in excess of 20 per cent to June 30 this year as a booming share market helped the $3 trillion sector post its strongest returns in 24 years, according to research house Chant West.

Top performer growth fund was Mine Super, an industry fund for coal miners, that returned 22.6 per cent over last financial year.

Mine Super has 61 to 80 per cent of its funds invested in high-return assets such as equities when the company decided to boost its exposure to the share market in the early stages of the pandemic, said its chief investment officer Seamus Collins.

Seven other funds including Colonial First State, Hostplus, MLC and AustralianSuper also posted returns in excess of 20 per cent.

The median growth fund posted an 18 per cent over the 2020-21 financial year – the sector’s best result in 24 years said Chant West.

“This would have been inconceivable a year ago after the financial disruption caused by COVID-19” said Mano Mohankumar, senior investment research manager of Chant West.

He said that the top funds over the past year had higher allocation to listed shares – despite the battering the share market took in February and March 2020.

“Australian shares gained an impressive 28.5 per cent while international shares surged 37.1 per cent in hedged terms,” Mr Mohankumar said.

The weakest performing asset classes during the financial year were bonds and cash.

“Cash was virtually flat with a return of just 0.1 per cent while Australian and international bonds fell 0.8 per cent and 0.2 per cent respectively,” Mr Mohankumar said.

Over the last 10 years, industry funds AustralianSuper and Hostplus were the top-performing growth funds delivering annual returns of 9.7 per cent to members.

“The typical long term objective for growth funds is to beat inflation by 3.5 per cent which translates to about 5.5 per cent to 6 per cent per annum.

“The results delivered over the past two decades had been well above target.

“ Over the longest period we can measure, Australia’s major super funds have delivered on their promises to members, growing their wealth in real terms while protecting them from undue risk,” he added.

Top performers

Growth Funds year to June 30 2021

FUND                                                                                         RETURN

Mine Super Growth                                                               22.6%

CFS First Choice Growth                                                      21.7%

VISSF Balanced                                                                      21.6%

Hostplus Balanced                                                                 21.3%

MLC Horizon 4                                                                        20.8%

Sunsuper Balanced                                                                 20.7%

AustralianSuper Balanced                                                    20.5%

REI Super Balanced (My Super)                                          20%

Telstra Super Balanced                                                          19.9%

BT Active Balanced                                                                 19.7%

 

Source: Chant West

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