Kirby Rappell

A retail fund was one of only two balanced superannuation options to generate a positive return over the calendar year, but over a long-term horizon the smart money is with industry funds. 

Data released by Super Ratings found the median balanced growth option reported a -4.8 per cent return for the 2022 calendar year. 

The superannuation research firm claimed it was the fourth time since the start of the new millennium that superannuants have suffered a negative return over a calendar year. 

Only two funds delivered positive gains for the year: the Perpetual Balanced Growth Fund returned 1.7 per cent, while First Super just scraped over the line returning 0.1 per cent. 

The research found property and international shares drove the decline for the past year, but fixed interest also failed to act as a safety net. 

The industry has shifted from the classic 60/40 split of equities and fixed interest to relying on other asset classes for downside protection after fixed income failed to mitigate losses during the Covid-19 pandemic. 

SuperRatings executive director Kirby Rappell tells Professional Planner this change has led to the question of how asset allocation will look over the next couple of years. 

“We’ve moved from a market where everything was moving upwards together to much more variation and volatility in the market,” Rappell says. 

He adds fixed interest and international shares were the most “challenged” asset classes last year, both being down in the 9-11 per cent range. 

“That diversification really shone through from those traditional asset classes,” Rappell says. “For a lot of funds less exposed to fixed interest that’s helped over that past 12-month period.” 

Here for a long time 

Superannuants invest for a long time and a broader time horizon shows industry funds dominating long-term returns. 

Over the two-decade time horizon, the best-performing balanced option from a retail super fund was from Insignia Financial, the IOOF Employer Super Core – IOOF MultiMix Balanced Growth Trust which placed thirteenth, with a 7.9 per cent per annum return. 

Rappell says the longer-term story for the super industry hasn’t changed too much.  

“You do see a shift towards industry and not-for-profit funds [in terms of returns],” Rappell says.  

“That continues to be driven by the ability and willingness to have alternatives in the portfolios over that longer time period.” 

Top 10 balanced options over 20 years 

Fund  2022 return  Past 20-year return 
Hostplus – Balanced  -2.5%  9.1% 
AustralianSuper – Balanced  -4.8%  8.8% 
ART – Balanced   -2.6%  8.6% 
Unisuper – Balanced   -5.4%  8.4% 
Cbus – Growth (MySuper)  -4.8%  8.4% 
CareSuper – Balanced  -2%  8.3% 
HESTA – Balanced Growth  -3.7%  8.1% 
Hostplus – Indexed Balanced  -6.3%  8% 
Vision Super – Balanced Growth  -5.3%  8% 
Aware Super – Growth  -6.7%  8% 

Source: Super Ratings 

The SuperRatings balanced index returned 7.5 per cent over the same period.

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