The top performing super fund that you’ve never heard of – as the best 10 are revealed

A small pension organization that few people outside its members have ever heard of was the best performing pension fund in the 2023-2024 financial year.

Mine Super, which as its name suggests focuses on miners and other high-risk occupations, topped research firm Chant West’s annual list for the second year in a row, with growth of 10.7 percent.

Also in first place were retail super funds Colonial First State and Insignia, while three other funds in the top 10 also grew by more than 10 percent.

Chant West said that ‘despite the uncertain economic and geopolitical backdrop, super funds have had another excellent financial year’.

The median across all funds was 9.1 per cent for their growth options. These are investment options with 61-80 per cent of growth stocks, with most of MySuper’s standard options falling into this category.

“International equities were the biggest contributor, rising 21.5 percent for the year, driven by strong performance in the technology sector,” said Mano Mohankumar, senior investment research manager at Chant West.

‘Not surprisingly, the better performing super funds generally had higher allocations to these asset classes.’

Although Australian shares did not reach the same heights, it was a good year with a return of 11.9 percent.

International stocks rose 21.5 percent over the year. Stock photo of Australian currency

According to Mr Mohankumar, all asset classes have performed positively this year, with the exception of unlisted real estate (not listed on a market like the ASX), which has struggled with falling office and retail property valuations following the pandemic.

The 10 best-performing growth funds in the decade to 30 June 2024 were all sector super funds, which are managed in the interests of their members rather than in the interests of external shareholders.

According to Chant West, retail funds, which pay out profits to shareholders, have performed well over the past two years, but industry funds have offered better growth over the long term.

Mr Mohankumar said clients should look at long-term returns more than short-term returns as pension is an investment for retirement.

However, he warned that a median return of 9.1 percent “should not be considered normal” and that the past year had been a very good one.

The average return for most super funds is generally around 3 to 4 per cent plus CPI over 10 years, which equates to around 6 per cent per annum.

The 2023-2024 budget year was the 13th positive return in the past 15 years.