Nation’s best super funds named
The best returns in 2022-23 came from a little-known Victorian fund. How did your superannuation perform?
Super returns have bounced back from the 3.4% losses a year ago.
For super fund members with shares in their investment portfolio, the strong rebound is due to the improved performance of international markets over the past financial year.
All balanced funds – those with between 60% and 76% of their portfolio invested in growth assets – are understood to have delivered positive returns to members, while the top 10 funds provided members with returns of over 9.5% for the financial year.
Members in several of the best-performing funds will have received double-digit returns.
According to industry research company SuperRatings, ESSSuper, the fund for emergency services and Victorian government employees, was the top-performing balanced superannuation fund for the year ending June 2023.
ESSSuper’s return of 13.3% eclipsed the median 9% in SuperRatings’ index of 50 super funds.
Next was Vision Super’s Balanced Growth option and Brighter Super’s Balanced Option, with returns of 11.0% and 10.6% respectively.
UniSuper was the best-performing big fund, with returns in its balanced option of 10.3%, followed by the Australian Retirement Trust (10%) and Aware Super (9.7%).
SuperRatings observed that a key theme for returns in 2023 was that funds with higher exposure to shares generally outperformed for the year, while those with greater exposure to unlisted property and alternatives reported more subdued outcomes.
As a result, members who were invested in index funds generally did quite well, given the strong focus on listed shares in these options.
The Australian Financial Review commented that the double-digit returns come as the super industry turns to equities to offset plummeting commercial property valuations, with super fund investment chiefs pointing to international tech stocks as their biggest source of returns last financial year.
ESSSuper head of investments Daniel Selioutine said the $34 billion fund’s exposure to equities and bonds was a key source of its stellar returns.
SuperRatings executive director Kirby Rappell said funds with higher equities exposure generally outperformed those with more unlisted property, and members invested in index funds did especially well.
Investments with a sustainable focus also outperformed over the year with Raiz Super’s Emerald investment option matching the top performing balanced option with a return of 13.3%.
Mr Rappell warned that super was a long-term investment and most ethical options were “still relatively new in superannuation terms”.
Hostplus’ Balanced option remained the highest performing balanced option over 10 years, returning 8.9% p.a. followed by AustralianSuper (8.9%), ART and UniSuper (both 8.4%), and Cbus (8.3%).
He said members should also brace for volatile returns this financial year, mirroring warnings by superannuation executives earlier this month.
“The sharp rise in inflation and global uncertainty has been a constant over the past couple of years, and we expect this to persist,” he said.
