Australian superannuation funds experienced strong growth in September and are on track to deliver substantial gains in the calendar year 2024 (CY24), according to new Chant West data.
The median growth superannuation fund, which typically has 61% to 80% of monies invested in growth assets like international stocks and ASX shares, rose by 1.2% in September.
This took the median growth fund's return over CY24 to 8.6%, with three months still to go.
Chant West senior investment research manager Mano Mohankumar said strong share market performances around the world meant higher-risk superannuation funds had benefitted most.
Mohankumar commented:
In September, share markets globally benefitted from the US Federal Reserve officially cutting interest rates for the first time since March 2020, with more to come.
While a reduction was largely already priced into markets, the 50-basis point cut was larger than usual.
Markets were also boosted by China announcing a raft of stimulus measures to lift economic growth and support its struggling property market.
In September, ASX shares returned 3.1%, while developed-market international shares returned 1.5% in hedged terms.
However, Mohankumar said the rise of the Australian dollar, from 68 US cents to 69 US cents, turned that 1.5% gain into a small loss of 0.5% in unhedged terms.
He added that superannuation funds have about 70% of their international shares exposure unhedged.
Emerging-market shares returned 4.3%, led by China.
Australian bonds returned 0.3%, and international bonds returned 1.1%, as yields fell.
Chant West's latest Super Fund Performance Survey showed that all five median superannuation fund types experienced gains in the month of September.
Here are the numbers.
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How much has your superannuation grown in 2024?
Balanced funds
This is the default type of superannuation fund assigned to workers who do not choose a fund type themselves. Balanced funds have 41% to 60% in growth assets. The rest is invested in defensive assets such as cash and bonds. These funds gained 1% in September and have lifted 6.9% in CY24-to-date.
Conservative funds
Conservative funds have 21% to 40% of monies in growth assets. They are popular with pre-retirees who prefer lower-risk strategies in their last few years of work. Conservative superannuation funds returned a median of 0.7% in September and 5.2% CY24-to-date.
Growth funds
Growth superannuation funds have a 61% to 80% allocation to growth assets. In September, the median growth fund lifted 1.2% and is currently up 8.6% in calendar year 2024.
High growth funds
High-growth superannuation funds are suitable for younger workers who will be investing for the much longer term. This enables them to take higher risks for higher returns.
High-growth funds allocate 81% to 95% of monies to growth assets. In September, the median high-growth fund rose by 1.3%. In CY24-to-date, these funds are up by an impressive 10.4%.
All growth funds
All growth funds allocate 96% to 100% of superannuation monies to growth assets. These funds are experiencing the strongest growth in 2024. The data shows the median all-growth fund rose by 1.7% in September. Year-to-date, these funds have delivered an outstanding median return of 12.3%.
How much superannuation do you need for retirement?
The Association of Superannuation Funds of Australia (ASFA) recommends we aim for $100,000 in superannuation by age 67 to fund a modest retirement.
A comfortable lifestyle requires more super savings: $595,000 for singles and $690,000 for couples.
