Australia’s largest superannuation fund AustralianSuper returned 11.08 per cent for its balanced option for the  2017-18 financial year it reported on Wednesday. The fund says 90 per cent of its 2.2 million members are in the balanced option.

That brings returns to 9.3 per cent per annum over three years and 10.51 per cent over five years for the balanced option. However it was down on the previous year’s 12.44 per cent.

Strong returns across a diversified portfolio drove the result and led to the ninth consecutive year of positive results. It means the fund has had double digit returns in five of the last six years.

The result bettered company projections of a 9.2 per cent return for the balanced fund. 

Deputy Chief Executive and Chief Investment Officer, Mark Delaney, said the drivers of performance for the Balanced Option were a high allocation to listed equity markets, along with an underweight allocation to the lower returning defensive asset classes such as fixed income and cash.

“Stable global growth has supported markets across asset classes and as a result AustralianSuper members have seen another year of very impressive returns,” Mr Delaney said.

AustralianSuper has also said in recent days they would reduce their exposure to equity markets and bring more of their funds management functions in-house to reduce costs.

Mr Delaney cautioned that fluctuations in returns should be expected and members need to take a long term view on performance.

“The Fund has seen a prolonged period of very strong growth but we know that at some point in the future markets will be more subdued,” he said.

“We will be keeping an eye on key policy makers, particularly the US Federal Reserve in relation to interest rates while also monitoring any action in relation to tariffs or other measures which may affect global trade,” he said.

AustralianSuper aims to continue to maintain a widely diversified and actively managed portfolio in order to provide stable long-term returns for members, he said.

Mr Delaney said the prolonged resilience of global markets has gone against what may have been expected.

“In a similar scenario to last year, global political uncertainty and increased trade protectionism did not have a sustained negative affect on markets,” Mr Delaney said.

AustralianSuper has $140 billion under management, up 16.6 per cent from the $120 billion under management a year ago.

The New Daily is owned by Industry Super Holdings, a company associated with AustralianSuper