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Top super funds of 2023 revealed: Is yours on the list?

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Some super funds surged to double-digit returns over the 12-month period.

Who said financial news has to be all doom and gloom?

2023 turned out to be the year of the great superannuation funds comeback. Buckle up, because these numbers are kind of a big deal: the median balanced option surged ahead with a 9.6% return for the full calendar year according to new figures from SuperRatings.

That's right, after a bit of a stumble with a 4.8% loss in 2022, super funds didn't just get back on their feet – they did a full-on victory lap.

So, if you're curious about how these funds turned the tables in a year filled with economic plot twists, stick around.

We're diving into the world of super funds that made 2023 their year.

Expert's insight: Highlighting the common ingredient(s)

"International shares have been the standout performer over the year, led by strong growth in technology shares," said Kirby Rappell, executive director at SuperRatings.

"Returns were also strongly supported by Australian shares and further bolstered by rising cash rates improving fixed interest and cash returns."

On similar grounds, Chant West senior investment research manager Mano Mohankumar revealed the key strategy common among the top-performing super funds in 2023.

"With share markets performing so well in 2023, the better-performing funds over the year were generally those that had higher allocations to shares, particularly international shares," Mohankumar said.

This approach seemed to have paid off in the year's unpredictable financial climate. Let's delve into the specifics with insights drawn from Chant West's data.

International shares. These are the big stars of the year with a whopping 23% return. The technology sector with the artificial intelligence (AI) boom, played a huge role in this success. (Read our guide on how to buy international shares from Australia.)

Australian shares. Not too far behind, they did pretty well too, bringing in a 12.1% return, triggered by the rising interest rates. Read our guide on how to buy the best ASX shares.)

Also, cash investments delivered a neat 3.6% return in 2023. Fixed interest saw a 4.9% increase, which is pretty solid. Lastly, property investments also had a good year, with a 7.1% return within the same time period.

Top performing superannuation options in 2023

Balanced super funds are popular as they offer a balanced blend of growth and stability within their portfolios, typically allocating around 60% to 76% to growth assets, such as shares and property, while dedicating the remaining 24% to 40% to defensive assets, such as bonds and cash.

This makes them an attractive choice for those aiming to achieve both capital growth and risk management in their investments.

In 2023, the top 3 performers were as follows:

  1. Hostplus – Indexed Balanced option. With an impressive 13.2% return over the year, Hostplus took the lead among balanced options. Over the past decade, it maintained a steady 7.3% annual return. These options invest 60%-76% of the money invested in growth assets.
  2. Brighter Super Optimiser Accumulation – Multi-Manager Growth Fund. A close second, with a 13.1% return in 2023.
  3. ESSSuper – Balanced Growth. Claiming the third spot with a 12.8% return in 2023.

Additionally, you can also consider looking at last year's Finder Awards winners.

Top performing superannuation options in the past decade (up to 31 December 2023)

Among the top-performing funds over a 10-year period, the Hostplus – Balanced option stands out, boasting an average annual return of 8.3%.

It's worth noting that it's the sole fund in the index with an annual return exceeding 8% over the past decade.

The second position is jointly held by AustralianSuper Balanced and Australian Retirement Trust - Super Savings - Balanced, both achieving an average annual compound return of 7.9%.

You can look at the top 10 balanced options according to SuperRatings in the table below:

Option nameAverage 10-year return
Hostplus Balanced8.3% p.a.
AustralianSuper Balanced7.9% p.a.
Australian Retirement Trust - Super Savings - Balanced7.9% p.a.
UniSuper - Balanced7.8% p.a.
Cbus - Growth (MySuper)7.6% p.a.
Vision Super - Balanced Growth7.5% p.a.
CareSuper - Balanced7.5% p.a.
HESTA - Balanced Growth7.4% p.a.
Spirit Super - Balanced (MySuper)7.4% p.a.
Hostplus - Indexed Balanced7.3% p.a.

Data from SuperRatings

"Members are likely pleased with this year's performance, with most seeing a full recovery from last year's losses," said Rapell.

"Long term strategy and high levels of diversification continue to result in impressive long-term performance by those managing our retirement savings."

"As we look ahead to what 2024 might bring for super fund returns, ongoing uncertainty means it remains important to set a strategy and stick with it despite the potential for periods of falling balances."

Power of compounding interest

Investing wisely with a diversified approach can lead to significant growth over time. Consider this example, as per SuperRatings' data:

  • Balanced Index investment. If you had invested $100,000 in a median-performing balanced option a decade ago, your investment would now be worth approximately $189,000. This assumes no additional contributions were made.
  • Capital Stable Index investment. Alternatively, if you chose the typical capital stable option with the same initial investment of $100,000 ten years ago, your account balance would have grown to approximately $148,000 today.

You can read more about the latest best super funds in our guide attached here.

It's important to note that capital stable options are more conservative, with lower exposure to growth assets (20-40%). These options are often preferred by retirees due to their lower volatility compared to balanced options.

Balanced options, on the other hand, distribute investments across various asset classes, with a significant focus on shares. This means that the performance of shares plays a pivotal role in their long-term performance.

Keep an eye on market dynamics

While 2023 saw positive results, remember that investment markets can be volatile. Balanced options can experience fluctuations, both positive and negative.

Selecting the best super fund is crucial but there are key factors to consider:

  • Strong long-term returns: Look for funds with consistent 10-year returns above 7%.
  • Low fees: Opt for funds with annual fees under 1.5% of your super balance.
  • Age-appropriate strategy: Align your investment strategy with your age and retirement goals.

Use these criteria as a guide to find the super fund that suits your needs and goals. Your financial future is worth the careful consideration.

If you haven't looked at your super in a while, it could be time to switch. Compare super funds to see how your current fund stacks up and, if you decide it's time to switch, you can easily change super funds with our 4-step guide. Need help deciding on a fund? Finder's best super fund picks might be a good place to start.

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