Superannuation fund returns on track for 9pc returns

are tipped to deliver a better than expected 9 per cent return on the retirement savings of 15 million Australians when the financial year ends next week, new data reveals.According to data from research house Chant West, super fund customers invested in growth options are likely to earn 9 per cent on their savings for the year. Those who have chosen more aggressive investment strategies are tracking 0.5–2 percentage points higher than the growth option.

Even those customers who have opted for more conservative options have notched up returns of 4.8 per cent in the 10 months to the end of May, thanks to high-interest rates. Chant West defines “growth options” as those with between 61 per cent and 80 per cent of their portfolios in growth assets. This covers the default MySuper offerings of most funds.“International shares this financial year should finish over 20 per cent , then Aussie shares through to mid-June are at around 12 per cent,” said Chant West senior investment research manager Mano Mohankumar.The resilient US economy was a strong theme in the FY24 result, Mr Mohankumar said.

“If you think back to nearly two years ago, FY22 closed with some sharp losses over the June quarter amid surging inflation and uncertainty as to when interest rate rises might come to an end.“… A final result close to 9 per cent would be an excellent outcome, given all of theto interest rate decisions locally and abroad and that there had been some volatility around geopolitical issues, but for the most part, these factors had not “had a big impact”.

“The experience over the past two years is another reminder of the importance of remaining patient and not getting distracted by shorter-term noise,” he said., which generally range from CPI plus 1.5 per cent for conservative options through to CPI plus 4.25 per cent for their most aggressive growth strategies.

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