Money Your Super AustralianSuper earns stellar returns for members in 2016-17
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AustralianSuper earns stellar returns for members in 2016-17

AustSuper outperforms.
Overseas share markets have helped drive returns. Photo: Getty
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Australia’s biggest superannuation fund, AustralianSuper, has returned investors in its balanced fund 12.44 per cent for the year to June 30 2017. That is well above the average for funds.

It is the eighth consecutive year of positive returns since the global financial crisis and the fourth year out of five with double digit returns for members, said deputy CEO, Mark Delaney. Around 90 per cent of members invest their retirement savings in the balanced option, he said

“It’s a great result for our members and it shows the benefit of active management as well as our program to internalise the management of our assets,”, Mr Delaney said.

The result was driven by a stronger global economy which in turn boosted global equity markets. This was supported by good returns from other diversified assets such as infrastructure, he said.

“The return to above-average performance reflects the improving global economy, particularly in China and the US. Investment markets have been resilient in the face of greater political uncertainty,” Mr Delaney said.

AustralianSuper has 2.2 million members and $120 billion under management. Its balanced option has been positive in nine of the last 11 years. 

The fund’s high growth option outperformed the balanced option, earning 13.76 per cent for the year. Interestingly, the second best performer was the socially aware option which returned 13.1 per cent.

Research house Chant West has said median growth funds should deliver investors 10.5 per cent for the June year. Industry funds are expected to lead the way, returning members 11 per cent on average, at least 80 basis points above retail funds.

Retail funds will return an average of 10.2 per cent, Chant West director Warren Chant said. Self-managed super funds are expected to underperform their pooled fund peers by 16 per cent according to Rainmaker.

That should see SMSFs return 8.82 per cent to investors.

On these figures, AustralianSuper has performed well above the average for superannuation overall.

Performance across AustralianSuper’s investment options.

Mr Delaney said around $26 billion, or about 22 per cent of the AustralianSuper’s assets, are now managed internally and he expected this to increase in coming years. The internal team was outperforming external managers by about $100 million annually and should deliver further cost savings to members, he said.

“The diversified nature of our balanced option has allowed us to manage market ups and downs over the long term. It’s the breadth of the asset classes that we invest in and our active management of these investments that helps create sustainable long-term returns for members.” Mr Delaney said.

*The New Daily is owned by a group of industry super funds