Superannaution Benchmarks and Your Portfolio

Scott Francis looks at the drivers behind superannuation returns for FY23 and how they can be used as a benchmark for your portfolio.
By · 21 Sep 2023
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21 Sep 2023 · 5 min read
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The end of the financial year sees a flurry of activity. Looking at companies we get to ‘see under the bonnet’ of their full year returns, and look ahead to the dividend season in September and October. For managed investments, the end of year returns are published, alongside eye-wateringly complex tax statements, and we can compare the returns with similar investments. For superannuation, the annual results are in – and in some ways, there is a transparency about superannuation returns. The simplicity of seeing returns after fees, and after tax, is a pleasant change from the occasional opaqueness of other areas of reporting investment returns.

This article focuses on three key elements around the end of financial year superannuation returns:

  • 2023 financial year superannuation returns that can be used to benchmark the returns from your portfolios
  • Reflection on the drivers of return for the 2023 financial year
  • Looking at QSuper’s returns, to consider a discussion of returns at a fund level

Benchmarking Returns

The first thing we need to do is to look at the returns from superannuation funds for the 2023 financial year (to the end of June, 2023).

Importantly these are the average returns in each category, after fees and taxes. That means for someone looking to benchmark their self-managed super fund returns, they should adjust their returns for any fees paid over the year, plus any tax (perhaps a refund of franking credits).

The percentage in brackets refers to the proportion of the fund held in growth assets.

Asset Allocation

Financial Year Return (2023)

High Growth (81 to 95%)


Growth (61 to 80%)


Balanced (41 to 60%)


Source: Chant West

There are no surprises in these figures. 

With a positive year for both Australian and global shares, the higher a fund’s exposure to growth assets, the larger the return. The trade-off for the funds with smaller exposure to growth assets, is their ability to perform better in markets when growth assets perform poorly.

Digging Deeper into the Last 12 Months

As well as the story of strong returns from Australian and global shares there is perhaps the most significant investment story of the 2023 financial year – the increase in the cash rate across the 12 months.

This had a number of impacts that might be seen when considering how this increase in interest rates might affect portfolios. The first is that for the first time in a long while, cash now contributes to returns, albeit that the interest rates increased as the year progressed, so on average the returns are not significant. The second is that fixed interest portfolios may have been impacted by rising interest rates – remembering that as interest rates rise, portfolios of bonds tend to fall in value (as bonds previously issued with lower interest rates become comparatively less attractive). And finally, there are some assets, including some unlisted assets, that tend to fall in value as interest rates rise (property, and infrastructure assets with a fairly set income stream). These may have underperformed.

Keeping an Eye on the Longer Term

Asset Allocation

Financial Year Return (to end June 2023)

10 Year Return (% pa) to end of June, 2023

Growth of $10,000 over 10 years to end of June, 2023

High Growth (81 to 95%)




Growth (61 to 80%)




Balanced (41 to 60%)




The addition of 10-year data to the initial table (to the end of June 2023) shows a similar trend amongst funds and their allocation to growth – in a period where growth assets performed more strongly, the greater the exposure to growth assets the better the superannuation fund return. That said, it was not a free lunch. During this time the 2020 Covid-19 downturn saw significant falls in growth asset values – the higher returns also came with volatility.

The final column shows the growth of $10,000 invested with each asset allocation over the 10 years to the end of June 2023. Keeping in mind that except for the last 12 months or so it was a period of relatively benign inflation, the outcomes seem attractive. Perhaps this is a reminder that as the annual returns come out, and are the subject of media interest, it is the longer-term returns that are more important in terms of portfolio returns, and perhaps deserve more scrutiny than they get.

QSuper Case Study

I am based in Queensland, and the government fund in Queensland (in which I have a small superannuation holding) is QSuper. 

QSuper provides an interesting case study relevant to this discussion, as after a period of strong returns their balanced fund had returns below the average in the 2023 financial year, returning investors 3.98 per cent.

It is interesting to look beyond just the figures and consider what makes up the fund. As of the 30th of June, the fund had 23.3 per cent of their assets in cash or fixed interest, 49.5 per cent in equities, 17.4 per cent in infrastructure, 5.9 per cent in real estate and the balance in commodities and alternative assets. This suggests an asset allocation in the 61 per cent to 80 per cent growth assets range. 

While the underperformance in 2023 is material, there is a slightly different story over a longer timeframe, where the average annual return is 7.22 per cent per annum – remaining in line with peers. QSuper make the comment that over this 10-year period, the volatility of the fund was lower than any fund in the SuperRatings Balanced Survey. At the end of the day, returns are important, however, all else being equal less volatility is attractive.

Accumulation vs Pension – an aside

An interesting element of the way that QSuper present their returns is that it allows a direct comparison between their superannuation returns and their pension returns, for the same fund. This is of interest to investors, as it gives some indication of the value of the tax benefits of the 0 per cent pension fund environment directly compared to the 15 per cent superannuation fund environment. 

The most recent returns have been updated to the end of August 2023, and for the 10 years to the end of August 2023 the accumulation fund has returned 6.99 per cent per annum, while the pension fund returned 7.9 per cent per annum – a returns advantage for investors of 0.91 per cent per annum when they move from accumulation (15 per cent tax rate) to a pension environment (0 per cent tax rate). While this is data from QSuper, it is likely to be similar for other funds.

The Impact of Interest Rates

QSuper also acknowledged the role that rising interest rates had played in their portfolio over the 2023 financial year, noting the high allocation to bonds that the fund holds. Bonds as an asset class tend to perform well when interest rates are falling (the higher interest payments of existing bonds become relatively more attractive), and poorly while they are rising. The allocation to bonds in the QSuper portfolio had been supportive of returns while interest rates were cut during the period of the Covid downturn, and then a drag on returns in the last financial year when interest rates rose sharply. 

Consistent with QSuper’s strategy around bonds, their July ‘Investment Performance and Economic Update’ includes a discussion of recent increases in bond holdings given higher interest rates. The update also includes historical data to the end of June 2023 for asset class returns.


The end of the financial year is a great time to reflect on investment performance, whether that be for superannuation or non-superannuation investments. Despite the tendency for there to be a focus on the year just gone, balancing that with the longer-term returns is important. Understanding what has happened over the period of the returns date, in the 2023 financial year a period highlighted by strong sharemarket returns, and rising interest rates, will help make the returns make sense.

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