The MySuper default offerings that account for the bulk of Australia’s A$2 trillion ($1.5 trillion) superannuation industry delivered, on average, a 2.9% return for the fiscal year ended June 30, Sydney-based financial services research firm Rainmaker Group reported Tuesday.
The latest year’s tally marks a sharp falloff from the strong gains enjoyed between 2013 and 2015. Even so, the average annualized return over the past three and five years for the more than 50 super fund options in Rainmaker’s SelectingSuper database remained at a healthy 8.3% and 8.1%, respectively.
And if 2.9% remains a modest rise for a 12-month period, it was still almost 2 full percentage points ahead of inflation, Rainmaker reported.
Super fund offerings with relatively high weightings to Australia’s listed property sector and fixed income over the past year had a competitive edge, as those asset classes climbed 24.5% and 7%, respectively.
Domestic and international equities — which together account for more than half of many super fund portfolios — were a drag on performance, with 12-month gains of 0.6% and 0.4%, respectively.
Brisbane-based QSuper’s “Aspire 2” balanced option — which delivered the year’s top return of 8.5%, among the 76 offerings covered by Rainmaker — had roughly 27% of its portfolio in public equities at the end of the fiscal year, half as much as many other super funds. Instead, it had a relatively high fixed-income weighting of 35.9%, as well as 10.9% in infrastructure and 7.5% in real estate.