The median growth superannuation fund (61% to 80% growth assets) finished the 2021 calendar year with returns of 13.4%, according to Chant West data.
Hostplus Balanced fund, it found, was the top performer for the year with a return of 19.1%, followed by Sunsuper Balanced (16.5%), Christian Super My Ethical Super (16%), and Mine Super Growth and TelstraSuper Balanced (both at 15.9%), while the worst performer delivered 10%.
Chant West senior investment research manager, Mano Mohankumar, said funds had exceeded expectations in delivering a 10th consecutive positive return given the ongoing disruption and health concerned caused by COVID-19.
“The better-performing funds over the year were generally those that had higher allocations to listed shares, in particular international shares. Australian shares gained 17.5% while international shares surged 24.3% in hedged terms,” he said.
“The traditional defensive sectors such as bonds and cash were the weakest performers over the year, so keeping a low allocation to those would have helped performance. Cash had a return of zero while Australian and international bonds fell 2.9% and 1.5%, respectively.”
Mohankumar noted of the unlisted asset classes, private equity was the standout performer as it delivered over 40%, while unlisted infrastructure and unlisted property delivered returns in the low-teens on average.
“Listed real assets also had a strong year with Australian and international listed property surging 27% and 28.6%, respectively, while listed infrastructure returned 17%,” he said.
“Funds would also have benefited from maintaining a higher foreign currency exposure, given the depreciation of the Australian dollar over the year (down from US$0.77 to US$0.73).”
The research house also said the last two years highlighted the resilience of super fund portfolios and the funds’ ability to limit damage when markets were weak along with capturing substantial upside when markets performed strongly.
“The 2021 result, in particular, is a continuing reward for those members who’ve remained patient throughout the COVID-19 crisis,” Mohankumar said.
“Since the market low-point at March 2020, growth funds have surged an astonishing 31%, which now sees them sitting 16% higher than the pre-COVID crisis peak that was reached at the end of January 2020.”
Looking at longer-term figures, the top-performing growth funds over the 10 years to 31 December, 2021, were AustralianSuper Balanced and Hostplus Balanced both at 10.7%.