October saw strong growth in super funds, with median growth fund gaining 1.8 per cent, bringing the return to 6.8 per cent over the first four months of this financial year.
It comes after a 15.6 per cent return for the 2012/13 financial year, which was the highest single year return since 1997, Chant West research said.
Listed share markets did well in October, with Australian shares returning 3.9 per cent. Share markets were the main drivers of growth fund performance.
International shares jumped 3.9 per cent in hedged terms but the return in unhedged terms was lower at 2.6 per cent on the back of the rising Australian dollar (from $US0.93 to $US0.95).
Chant West director Warren Chant said the long-term return objective for growth funds was to surpass inflation plus 3.5 per cent per year over five years, which means a return of about 6.5 per cent.
He said the strong performance over the past 18 months, along with the global financial crisis (GFC) period working its way out of the five-year return period, had seen a sharp rise median growth fund's return, at 8 per cent.
Growth funds are up 60 per cent since the GFC lowest level at the end of February 2009, standing at 18.5 per cent above their pre-GFC high in October 2007.
"All eyes were on the US in October with the 16-day partial government shutdown causing markets to react nervously," Chant said. "However, share markets rebounded strongly after a last minute agreement was reached to raise the US debt ceiling which prevented the possibility of a US default and saw the government resume full operations.
"Domestically, the RBA kept rates on hold at 2.5 per cent at its November meeting. While most recent economic data released has been upbeat, it's too soon to know whether this improvement is sustainable."
Industry funds and master trusts also did well in October, returning 1.8 per cent. But industry funds still lead over the long term.
They beat master trusts by 0.6 per annum over 10 years to the end of October, returning an annualised 7.3 per cent against 6.7 per cent.
According to Super Ratings, property options gained 1.7 per cent for the month while diversified fixed interest were up 0.4 per cent and cash options were up 0.2 per cent
"October's 1.8 per cent gain is another positive in a string of good returns to members, with 17 out of the last 20 months of superannuation returns finishing in the black," Super Ratings' founder Jeff Bresnahan, said.
"With the 10-year return sitting at 7.0 per cent per annum, funds continue to perform strongly against their long-term objectives, in spite of the significant volatility, both locally and across the globe, over this time."