Mano Mohankumar
Super funds’ strong start to FY26 continues
Super funds continued their strong start to FY26 with the median growth fund (61 to 80% in growth assets) up 1.3% in August. With international share markets up in September so far, Chant West estimates the median growth fund is up 3.2% over the first two-and-a-half months of FY26.
Chant West Head of Superannuation Investment Research, Mano Mohankumar, says that listed share markets, which are the main drivers of Growth fund performance, delivered positive returns in August. “Australian shares reached new highs after advancing 3.2% over the month, buoyed by a strong rebound from the resources sector.
“Despite ongoing uncertainty around where tariffs will land, international shares also performed well, supported by a robust US corporate earnings season and increasing expectations of an interest rate cut by the US Federal Reserve at its September meeting. Developed market international shares gained 2.1% in hedged terms, but the appreciation of the Australian dollar (up from US$0.64 to US$0.65) limited the return to 0.9% in unhedged terms. Emerging markets shares underperformed developed markets with a small loss of 0.4% in unhedged terms. Over the same period, Australian and international bonds posted gains of 0.3% and 0.5%, respectively.”
The table below compares the median performance to the end of August 2025 for each of the traditional diversified risk categories in Chant West’s Super Fund Performance Survey, ranging from All Growth to Conservative. All risk categories have generally met their typical long-term return objectives, which generally range from CPI + 1.5% for Conservative funds to CPI + 4.25% for All Growth.
Long-term performance remains above target
MySuper products have been operating for just over 11½ years, so when considering performance, Mohankumar says it’s important to remember that super is a much longer-term proposition.
“Since the introduction of compulsory super in July 1992, the median growth fund has returned 8% p.a. The annual CPI increase over the same period is 2.7%, giving a real return of 5.3% p.a. – well above the typical 3.5% target. Even looking at the past 20 years, which includes three major share market downturns – the GFC in 2007-2009, COVID-19 in 2020, and the high inflation and rising interest rates in 2022 – super funds have returned 7.1% p.a., which is still comfortably ahead of the typical objective.”
The chart below shows that for most of the time, the median growth fund has exceeded its return objective over rolling 10-year periods, which is a commonly used timeframe consistent with the long-term focus of super. The exceptions are two periods between mid-2008 and late-2017, when it fell behind. This is because of the devastating impact of the 16-month GFC period (end-October 2007 to end-February 2009) during which growth funds lost about 26% on average.
