Aussie super funds defy volatility to post double-digit returns

Two of Australia’s largest retail superannuation fund licensees, AMP and MLC, have generated solid double-digit returns proving their resilience in the face of this year’s US tariff-induced volatility.

AMP Limited said that for the 12 months to 30 June members of its MySuper 1970s, 1980s and 1990s options had achieved returns of 12.7%, 12.9% and 12.8% respectively.

At the same time, it said that AMP’s MySuper 1950s and 1960s funds had delivered returns of 10.1% and 11.1% respectively.

The news from AMP came at the same time as Insignia Financial’s MLC High Growth option generated 11.4% and MLC MySuper Growth option returned 10.1%.

Industry fund HESTA reported that its MySuper Balanced Growth option had delivered 10.18% while among its other super investment options, Indexed Balanced Growth, High Growth and Sustainable Growth achieved very strong annual returns of 12.01%, 12.00%, and 11.06%¹, respectively.

Commenting on the outcome, MLC Asset Management chief investment officer, Dan Farmer described the past financial year as being one of the noisiest experienced in a while.

“…but despite the noise, we have delivered strong returns and good outcomes for members, against a volatile market backdrop,” he said.

“One of the key drivers of this strong performance has been global and Australian equities. We’ve seen a change of government in the US, geopolitical issues and moderating inflation, yet equity markets have remained strong.

“We were well positioned for this and maintained neutral equity weights throughout the year. Holding that neutral weight sounds easy, but there were times throughout the year where that was pretty challenging, and we had to actively rebalance our portfolios to stay close to benchmark. The worst thing you can do in these situations is panic and make knee jerk decisions. We remained calm and disciplined, held equity weights and that has put us in pretty good stead over the year.”

AMP chief investment officer, Anna Shelley said that while markets have shown strong signs of recovery in recent months, volatility remains a key feature of the current environment.

“Over the past year, global equity markets experienced considerable volatility, driven by a complex geopolitical environment — including persistent conflicts, shifting trade dynamics and ongoing uncertainty around inflation and interest rate policy.

“Despite these headwinds, equity markets have rebounded strongly over the past few months in the US and parts of Europe, as inflation has moderated and expectations of rate cuts have returned.

“Technology and large-cap growth stocks have led the charge, and our portfolios have been well-positioned to capture that upside.

“Our overweight to US shares contributed meaningfully to performance in the first part of the year — and we closed that overweight in early February, anticipating risks around US trade policy,” she said.

HESTA chief investment officer, Sonya Sawtell-Rickson said the Fund’s investment team was on the lookout for opportunities to continue to drive performance and build the retirement savings for members over the long-term.

“We started the year with a cautious stance, and our robust liquidity management and stress testing allowed us to take advantage of long-term buying opportunities during the periods of market volatility,” Ms Sawtell-Rickson said.

Sawtell-Rickson added policy announcements in the US and conflict in the Middle East had impacted markets in recent months, with management of these risks remaining a focus.

“While volatility has eased after a surge in March and April, geopolitical events remain an important consideration as we head into the new financial year,” she said.

“Our expectation is that global economic growth will likely be slower, though the response of several central banks has helped temper recession fears. Further rate reductions are expected over the year ahead, including here in Australia, which should provide additional support to the economy and households.”