Super returns set to end FY24 up 9%

Mike Taylor

Managing Editor/Publisher, Financial Newswire

21 June 2024

Australian superannuation fund returns appear set to end the financial year in solid positive territory – the 13^th time they will have done so in the past 15 years, according to Chant West.

The Chant West analysis for May confirmed that super returns had moved back into positive territory after a lack-lustre May with the median growth fund (61-80% in growth assets) was up 0.9% over the month.

It said that with markets up in June so far, and with just over a week of the financial year remaining, Chant West estimated the median growth fund return for the finahcial year is sitting at about 9%.

Chant West Senior Investment Research Manager, Mano Mohankumar said resilient share markets had been the primary driver of the healthy financial year return, particularly international equities.

“A final result close to 9% would be an excellent outcome given all of the uncertainty around inflation, expectations of when the Fed will start cutting interest rates and ongoing geopolitical tensions,” he said.

“This year’s result would follow the better-than-expected return for FY23 of 9.2 per cent. The experience over the past two years is another reminder of the importance of remaining patient and not getting distracted by shorter-term noise,” Mohankumar said.

“If you think back to nearly two years ago, FY22 closed with some sharp losses over the June quarter amid surging inflation and uncertainty as to when interest rate rises might come to an end. At that time, very few could have foreseen a return of 19% over the subsequent two years. More importantly, super funds continue to meet their long-term return and risk objectives,” he said.