Australians who hold their superannuation with Suncorp, Australian Ethical and Vision SS have emerged from 2020 with the best returns, despite record volatility.
Fresh data from superannuation research house SuperRatings reveals that while the Australian share market saw a rapid tumble in March 2020, it recovered well, with the leading balanced super fund returning 9.6 per cent over the year.
Suncorp’s leading balanced fund was followed by Australian Ethical’s balanced fund which returned 8.0 per cent.
SuperRatings said that while it’s important to recognise the top performers of 2020, members should also remember that long-term performance is the greater indicator.
“Overall, funds have done an excellent job of managing risks through a tumultuous period,” SuperRatings executive director Kirby Rappell said.
“Super is a long-term game, so it’s pleasing to see long-term returns remain healthy and ahead of their CPI+ targets.”
Over a 10-year period, UniSuper’s balanced fund and AustralianSuper’s balanced fund returned the most, with 10-year returns of 9.0 per cent per annum.
Those funds were followed by Cbus (8.9 per cent) and Hostplus’ (8.8 per cent) top balanced funds.
SuperRatings said the results show that superannuation’s comeback “is clear” as the funds post remarkable results. It also said the 10-year performance rankings highlight the quality of the superannuation offerings currently on the market.
However, 2020 highlighted the level of risk that comes with pursuing these rewards, with SuperRatings noting that shares - which took a beating in early 2020 - also deliver greater returns on average.
It ranked the top 20 funds according to their volatility-adjusted return to measure how well members were being rewarded for taking on the risk.
It found that QSuper’s balanced option had returned 7.9 per cent over the last seven years, and while this was lower than some of its competitors, it had delivered these returns while sidestepping more of the volatility its peers took on.
“What the calendar year figures hide is the rollercoaster movements members experienced as the market sold off back in March 2020 and then rapidly recovered,” Rappell said.
“As members accumulate wealth over time, market movements will have a bigger impact on their account balance in dollar terms. This is a challenge for funds and members as the average super balance rises over $100,000, with the need for education and support paramount..