Superannuation funds produced strong returns in 2019, continuing a run of positive returns that has been going for eight years. Growth funds were up by close to 15 per cent.
UniSuper Balanced was the top performing “growth” fund in 2019, with a return of 18.4 per cent, according to superannuation industry research group Chant West.
Other top performers include Tasplan Balanced, with a return of 17.6 per cent, CFS FirstChoice Growth (17.4 per cent), Australian Ethical Super Balanced (17.2 per cent), AustralianSuper Balanced (17 per cent), BT Multi-Manager Balanced (16.9 per cent), Aon smartMonday Balanced Growth (16.4 per cent), IOOF MultiMix Balanced Growth (16.2 per cent) LGIA Super Diversified Growth (16.1 per cent) and Legal Super MySuper Balanced (16 per cent).
While most of these funds are labelled “balanced”, Chant West has put them in the growth category (growth assets make up 61 to 80 per cent of total assets). The average return for the category in 2019 was 14.7 per cent.
The highest returns came in the “all growth” category (growth assets make up 90 to 100 per cent of total assets). Funds in this category produced an average return of 20.8 per cent.
In the “high growth” category (81 to 95 per cent growth assets) the average return was 17.6 per cent.
In the “balanced” category (41 to 60 per cent growth assets) the average return was 11.4 per cent. And in the “conservative” category (21 to 40 per cent growth assets) the average return was 8.3 per cent.
Over the past 10 years the average all growth return was 8.9 per cent a year, the average high growth return was 8.8 per cent a year, the average growth return was 7.9 per cent a year, the average balanced return was 6.6 per cent a year and the average conservative return was 5.7 per cent a year.
Chant West senior investment manager Mano Mohankumar says shares were the main contributor to growth fund performance. The better performing funds that had higher allocations to local and international equities.
However, all asset classes delivered positive returns.
Mohankumar says super fund members should consider risks as well as returns. “It is important to set a risk objective. The last time the average growth fund return was negative was in the 2010/11 financial year and before that the 2007/08 financial year.