Rising investment markets boost member returns

3 July 2024

Improving economic and investment market conditions have helped lift member returns in the 12 months to 30 June 2024. All PreMixed and DIY Mix investment options have finished in positive territory. Importantly, the Balanced option where most members are invested, returned 8.46% for the year in Super accounts and 9.25% for Choice Income (pension) accounts.

Below we look at the market conditions and returns of the last 12 months, the long-term impact on super and we address the ‘where to from here?’.

 

The rear view

Performance snapshot

Investment Option Accumulation returns
1 year to 30 June 20241
Choice Income returns
1 year to 30 June 20242
PreMixed options
Balanced 8.46% 9.25%
High Growth 10.20% 11.25%
Socially Aware 8.38% 9.19%
Indexed Diversified 11.51% 12.82%
Conservative Balanced  6.47% 7.22%
Stable 4.59% 5.15%
DIY Mix options
Australian Shares 12.67% 14.09%
International Shares 17.19% 18.75%
Diversified Fixed Interest 3.06% 3.54%
Cash 4.03% 4.71%

 

Economic and investment market conditions over the year

Although members continued to face challenges in the form of higher living costs, investment markets showed improvement across the year. Easing inflation, strengthening consumer spending and the significant earnings growth in the technology sector, were just some of the conditions that drove investment markets higher.

Listed shares help drive Balanced option returns

Supported by improving economic conditions, listed shares were the largest contributor to the Balanced option’s positive performance. We saw Australian and international share markets return about 12% and 19% respectively, for the year to 30 June 2024.3.

Returns from other asset classes like infrastructure, credit, fixed interest and cash delivered more moderate returns when compared to shares.

The ups and downs of different asset classes over the year highlights the importance of investing in a diversified portfolio across different asset classes, geographies and sectors – this is a key part of our investment approach.

For AustralianSuper’s Chief Investment Officer – Mark Delaney,

‘Our long-term investment strategy is designed to be resilient when markets move up and down. Diversification helps reduce overall risk, protecting against losses in single asset classes and improving the chances of achieving consistent returns over time.’

 

What these returns mean for your super

A long-term perspective

When it comes to super – it's more about the marathon than the sprint. The Balanced option has consistently delivered strong long-term returns. Over the last 20 years, it achieved an average annual return of 7.85% for members with Super accounts. Your commitment to the long-term really matters.

Illustrating the impact

Imagine if you had invested $100,000 in the Balanced option 20 years ago. Today, your super balance would be $453,848. That’s more than four times your initial investment.

Growth of $100,000 invested in Balanced option – Super - over 20 years to 30 June 2024
The chart shows that $100,000 invested in the Balanced option in June 2004 would have grown to $453,848 over a 20 years to the end of June 2024.

AustralianSuper investment returns are based on crediting rates, which are returns less investment fees and costs, transaction costs, the percentage-based administration fee deducted from returns from 1 April 2020 to 2 September 2022 and taxes. Returns don’t include all administration, insurance and other fees and costs that are deducted from account balances. Investment returns aren’t guaranteed. Past performance isn’t a reliable indicator of future returns. Returns from equivalent options of the ARF and STA super funds are used in calculating return for periods that begin before 1 July 2006.

 

Where to from here?

Signs of growth ahead

We’re seeing positive signs in global economies and investment markets which should help support member returns in the years ahead.

We’ll continue to monitor how central banks are managing interest rates, how changing economic conditions influence consumer spending and how technological developments like AI impact productivity, company earnings and investment markets.

Balancing growth and stability

Based on this improved economic outlook, the Investment team have been adjusting the investments in the Balanced option. This has meant a small increase in our exposure to growth assets like listed shares. Over time, we expect to add additional exposure through unlisted assets like private equity, infrastructure and private credit.

With investing, we’re balancing potential growth opportunities with diversification to deliver positive returns to members, while providing stability in your returns during times of market volatility.

 

Join the conversation

Curious to learn more? Join our panel of experts on 13 August 2024 to discuss investment performance, economic trends and any questions you have about investments and your super.

Register here

References

  1. AustralianSuper super investment returns are based on crediting rates to 30 June 2024, which are returns less investment fees and costs, transaction costs, the percentage-based administration fee deducted from returns from 1 April 2020 to 2 September 2022 and taxes. Returns don’t include all administration, insurance and other fees and costs that are deducted from account balances. Returns from equivalent investment options of the ARF and STA super funds are used for periods before 1 July 2006. Investment returns aren’t guaranteed. Past performance isn’t a reliable indicator of future returns.
  2. AustralianSuper investment returns are based on crediting rates, which are returns less investment fees and costs, transaction costs and taxes. Investment returns aren’t guaranteed. Past performance isn’t a reliable indicator of future returns.
  3. Australian shares is the S&P/ASX 200 Accumulation Index, International shares is the MSCI All Country World ex Australia Index (in AUD).

 

Investment returns aren’t guaranteed. Past performance isn’t a reliable indicator of future returns.

This may include general financial advice which doesn’t take into account your personal objectives, financial situation or needs. Before making a decision consider if the information is right for you and read the relevant Product Disclosure Statement, available at australiansuper.com/PDS or by calling 1300 300 273. A Target Market Determination (TMD) is a document that outlines the target market a product has been designed for. Find the TMDs at australiansuper.com/TMD.


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