Super funds have delivered a third straight year of strong returns with shares rallying in the final quarter to push full year returns into double digits.
Leading superannuation research house SuperRatings estimates that the median balanced option returned 1.4 per cent over the month of June, bringing the return for the financial year to 30 June 2025 to an estimated 10.1 per cent.
It’s impressive
Since the bottom of the GFC in 2008/09, super funds have delivered positive returns in 14 out of the past 16 years, showing the success funds have achieved in growing members’ balances.
But this last 12 months has been a rollercoaster. In the first seven months to 31 January, we saw super funds delivering a return of 8 per cent. Following Liberation Day, this was estimated to have fallen as low as 0.8 per cent before rebounding to finish the year at 10.1 per cent.
Once again it reinforces the fact that you shouldn’t panic when there are hiccups in the markets.
The returns
The median growth option returned an estimated 1.5 per cent over the month, while capital stable options, which hold more traditionally defensive assets such as cash and bonds, returned 0.9 per cent.
Pension returns also ended the financial year strongly, with the median balanced pension option up an estimated 1.6 per cent over June. The median growth option also rose by 1.6 per cent, while the median capital stable option is estimated to deliver a 1 per cent return for the month.
The chart below shows that the average annual return since the inception of the superannuation system is 7.2 per cent, with the typical balanced fund exceeding its long-term return objective of CPI plus 3 per cent.
Withstanding volatility
Fund returns shrugged off significant disruption over the year including US tariff announcements, escalating geopolitical tensions in the Middle East, China’s rising AI capabilities and lingering uncertainty around the trajectory of inflation, to deliver the strongest result since the 2021 COVID rebound.
In global markets, technology stocks continued to deliver, although returns were less concentrated in the Magnificent Seven than previous years, driven by broad, ongoing investment in AI and a positive outlook for cryptocurrency – which also fuelled growth in supporting infrastructure such as electricity generation and supply. More locally, the financial sector, driven by bank shares, also continued to outperform, with CBA shares in particular driving growth.
Superannuation snapshot
So how good has the compulsory superannuation system been for Australia? It was a genius move by then Federal Treasurer, Paul Keating, to introduce it as a national savings scheme back in the early 1990s.
The below snapshot provides a great rundown on just how important superannuation has become for working Australians and the nation as a whole. It is the envy of the world.
