Leading industry super funds are set to declare double digit returns to members of their core (My Super) pooled funds, with several returning more than 13 per cent for the 2014 financial year.

This is the second strong year in a row and is a welcome comeback after the share market collapse associated with the global financial crisis.

The great majority of industry super fund members stuck with their balanced fund through the tough times and are now much better off.

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The old adage about the rich getting richer can also be applied to those with the right superannuation fund.

Having funds invested for significant periods, together with a diversified investment strategy that allows exposure to Australian and international shares, infrastructure, property, bond and credit markets, allows the long term average performance of these markets to combine with the magic of compound interest to produce strong long term returns.

In spite of the recent global financial crisis, many of our leading industry super funds have strong track records of performance going back 20 to 30 years (even longer in the case of LUCRF). This has a huge impact on the wealth of those who are able to stay with them over time.

For example, an average wage earner who had just $10,000 invested in super in 1994 and was contributing 10 per cent salary each year could have $243,853 in his or her account today after tax and fees, given an 8 per cent per annum average net earning rate.

Industry super funds of moderate scale like First Super and LUCRF, as well as the giants like Australia’s largest super fund, AustralianSuper, have done well in the relatively buoyant global financial climate of the past year.

Trish Donohue, Executive Manager Investment at Cbus, which calculates a “since inception” 30 year return of 9.3 per cent per annum and 13.5 per cent for the year, says that in addition to relying on diversification and actively balancing the sectors in which they invest, their strong cash flow allows them “to take a long term view and invest significantly and directly into property and infrastructure”.

Rob Fowler, Executive Manager – Investments and Governance at HESTA, has released the crediting rate for their default option Core Pool of 13.23 per cent for the year, with Australian shares, international shares and private equity all contributing strongly.

AustralianSuper has had another great year with a 13.88 per cent return in its flagship fund, on top of 15.6 per cent last year, though CEO Ian Silk cautions that members should not expect such returns to persist in all markets.

The point is to be invested for the long haul and in a strategic way for solid long term returns.

“With inflation running at just two per cent per annum high double digit returns are probably not sustainable. The point is to be invested for the long haul and in a strategic way for solid long term returns.”

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First Super looks set to declare 13.69 per cent in its growth fund and 11.48 per cent in its more conservative balanced fund.

Even higher returns are likely for the pension products of all these funds thanks to the absence of earnings tax.

This year’s stellar returns remind us that industry super funds collectively allow working people to save and invest as if they were the richest people on earth.

They can use the best professional advice, they do not have to sell when markets are down (that’s when they buy), no deal is too big and they can get a premium by investing for the long term.

Garry Weaven is Chair of The New Daily and of IFM Investors, which manages money globally for super funds and like investors