The average Australian superannuation fund has notched up some of its best returns in 16 years, with retail funds outperforming their not-for-profit peers.
For the year to June 30, median growth funds - the most common fund type, with 61 to 80 per cent invested in growth assets - returned an "exceptional" 15.6 per cent, on the back of rocketing sharemarkets here and abroad, according to figures by super research firm Chant West.
This makes it four consecutive financial-year returns averaging about 8.8 per cent a year, Chant West said, with median super fund growth of 10.5 per cent since the depths of the financial crisis.
The latest financial year gains have come about even as global markets have been rocked by speculation surrounding the future of the US quantitative easing program, a continuing slowdown in China and falling commodities prices.
Top performing funds for the 2013 financial year were BT Super For Life - 1960s Lifestage, which returned 18.6 per cent, industry fund REST Core (18.4 per cent) and Aon Balanced (17.9 per cent). But Chant West said although retail master trusts bested industry funds last financial year, due to their higher allocation of listed shares and property, not-for-profit funds have outperformed over the long term. Retail funds have returned 6.4 per cent a year over the past decade, versus industry funds' 7.5 per cent a year.
"The cumulative effect of that outperformance is significant, with industry funds posting a total return of 106 per cent over the 10 years, against 86 per cent for master trusts," Chant West said.
"Over the longer term, industry funds have outperformed master trusts because, as a group, they tend to have lower allocations to listed shares. In relative terms they do better when shares produce low or negative returns, as was the case for several years in the past decade.
"The corollary is that they also have higher allocations to unlisted assets such as private equity, unlisted property and unlisted infrastructure (19 per cent versus 4 per cent), which have performed relatively well for them."
Performance by fund type has also been mixed. Over a decade, members received the best results from aggressive funds and the worst performance from conservative options.
For returns over three years, all growth options (invested 100 per cent in growth assets) and high growth options (81 to 100 per cent growth) topped annual returns with 9.1 per cent. The worst performer was the conservative option (21 to 40 per cent growth assets), at 6.6 per cent.
For five-year returns, conservative and balanced options (between 21 and 60 per cent growth assets) both topped with 4.9 per cent annual returns. The worst performer was all growth at 3.2 per cent.
Over seven years, the conservative option led with 4.8 per cent annual returns. The worst performer was the aggressive all growth option, at 2.7 per cent.
For 10 years, high growth options led the way, returning 7.1 per cent. The worst performer was the conservative option, at 6.1 per cent. Best performing growth funds over 10 years were REST Core and Commonwealth Bank Group Super - Mix 70, which returned 8 per cent a year.