8% 2025 super returns in prospect

Despite the uncertainty and volatility driven by US tariffs and other geopolitical factors, Australian superannuation funds are headed for a third consecutive calendar solidly in the black and may even finish at close to 8%.

That is the assessment of specialist superannuation research house, Chant West with its Head of Superannuation Investment Research, Mano Mohankumar suggesting that a final result near 7.8% looks likely and would represent a good outcome in the circumstances.

The Chant West analysis is based on the median growth fund (61% to 80% in growth assets) returning 1.2% over October, the seventh consecutive month of positive returns.

Chant West noted that while there had been some share market jitters in November, so far, it estimates that with only six weeks of the calendar year remaining the median growth fund is sitting at a solid 7.8%.

“…a final result near 7.8% would be a good outcome, particularly given the uncertain economic and geopolitical backdrop throughout the year,” Mohankumar said. “That return is well ahead of the typical long-term return objective which translates to about 6%.”

“Super fund members should also remember that this year’s result follows two exceptional years, with returns of 9.9% in CY23 and 11.4% in CY24. Given the strength of share markets over the past three years, super fund members in higher risk portfolios have fared even better.”

Chant West said the healthy October return had been driven by strong developed international share markets which rose by 2.6% and 3.3% in hedged and unhedged terms respectively.

“Markets were buoyed by easing of trade tensions during the month, strong corporate earnings and optimism around AI. Emerging markets shares performed even better, returning an impressive 5.5%. Back at home, Australian shares yielded a small positive return of 0.4%. Over the same period, Australian and international bonds gained 0.4% and 0.7%, respectively.”