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Super fund returns on track for double digit growth

Eliza Bavin
·2-min read
<em>(Source: Getty)</em>
(Source: Getty)

A year after the start of COVID-induced lockdowns, Aussie super funds are enjoying the market recovery and are moving towards more comfortable economic conditions.

According to a report by SuperRatings, super funds appear to have emerged from the pandemic in a strong position with the median balanced option returning 9.7 per cent from 1 July 2020 to date.

“Super has notched up another positive month, thanks to the vaccine narrative and the relative strength of Australia’s economic recovery, which has exceeded expectations,” said SuperRatings executive director Kirby Rappell.

“Markets are still bumpy and members should not be surprised to see the value of their super fluctuate over the course of 2021.”

Pensioners’ returns are also doing well, with the median balanced option returning 10.3 per cent over the financial year to date.

Rappel said the pandemic has been a critical case study for super funds, and would inform the way financial institutions manage risks and respond to member needs in the future.

“A lot is happening in super at the moment, from regulatory change to further consolidation,” Rappell said.

“Funds have shown they are able to adapt to rapid changes on these fronts, while also managing risks and attending to the needs of members through a challenging market.

“The pandemic period will serve as a masterclass in change management for superannuation that will lead to a more robust and agile industry in the long run.”

Previous SuperRatings research found Suncorp, Australian Ethical and Vision SS emerged from 2020 with the best returns, despite the record volatility.

And choosing the right fund is extremely important as Australians in poor performing funds can lose as much as $13,000 over five years.

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