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Aussies score $39,000 super boost amid 34-year high

·2-min read
Piggy bank with the world 'superannuation' on the side and hands holding $100 notes.
Aussie super funds delivered their best annual return in 34 years, meaning your retirement just got a little more comfortable (Source: Getty)

Australia’s super funds just recorded their best annual financial year returns in 34 years meaning Aussies have more money in their retirement savings.

Default MySuper products are set to post 2020-21 financial year returns of 18 per cent after all fees and taxes, according to new research by Rainmaker.

The only time superannuation annual returns have beaten this was just before the 1987 stock market crash.

Returns in the 1986-87 financial year peaked at 19 per cent, only marginally ahead of this year's results.

Your super savings set to get a boost

The results mean that Aussies workers are set to benefit, said executive director of research and compliance at Rainmaker Alex Dunnin.

"These returns mean Australia's 13.5 million super fund members earned $520 billion in investment earnings in the past 12 months, or almost $39,000 each," Dunnin said.

“This is three-times the amount of all the money everyone contributed into their superannuation accounts through the year, six-times the amount of all the compulsory Superannuation Guarantee contributions or 17-times what was paid in fees."

Best performing sectors

According to the research the top three performing investments by super funds were:

  1. Listed property - up 33 per cent

  2. Aussie and International shares - up 28 per cent

  3. Global infrastructure - up 20 per cent

Terrific returns from Australian and international shares and listed property really drove positive results across the super space including retail funds and not-for-profit.

"Reinforcing this, unlisted and direct property, being an asset class that has generally been the backbone of why NFP funds have performed so strongly over the long-term, has delivered only meagre returns this financial year," Dunnin said.

Worst performing sectors

The worst performing sectors that offset the positive returns were:

  1. Aussie bonds - down 0.8 per cent

  2. Cash - down zero per cent (flat for the year)

  3. International bonds - up 0.2 per cent

Despite record MySuper returns, the ESG also seems to have come back from its past outperformance.

"Super fund ESG investment managers seem to right now be under performing some of the major ESG capital market benchmarks. As important as ESG is, the primary job of super funds will always be delivering the maximum investment returns they can," Dunning said.

Despite this, Rainmaker found that overall, super funds are on average outperforming their capital market indexes in international shares, property and fixed interest. They are under-performing on average in Australian shares.

"Super funds seem to be addressing their under-performance problems just at the right time," Dunnin said.

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