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QSuper best performing growth super fund in 2018


Although QSuper's Balanced fund was the top performing growth fund for the year, it returned just 2.80%.

Super funds were affected by the poor performance of the Australian and global share markets in the last few months of 2018, with some growth super funds achieving a negative return. Data released today by superannuation research group Chant West revealed QSuper's Balanced fund was the top performing growth super fund for 2018 with a return of 2.80%. Growth funds are those with 61-80% of their assets invested in growth assets (like shares).

A return of 2.80% for the year might seem terrible, especially considering you can get the same return (or even higher) with a high interest savings account. However according to Chant West, some funds actually returned a negative result in 2018, with the worst performing growth fund ending the year with a loss of 2.50%. In comparison to this, a return of 2.80% doesn't seem so bad.

Following QSuper was HESTA with a return of 2.5% for the year, with Club Plus in third place achieving a return of 2.20% as shown in the graph below. The median return for growth funds in 2018 was a weak 0.80%.

Senior investment manager at Chant West Mano Mohankumar said the results weren't surprising given the year we've had in global share markets, and that Australian super funds did well to end the year with any returns at all. "When you consider that the Australian share market fell 3.1% and international shares 7.5%, the median growth fund was still able to eke out a positive return," he said.

Mohankumar said it's important for Australians to look at the long-term performance of their fund, and not to get too worked up over short-term noise. "If you try to time the market by moving into a more conservative option after sharp market falls, not only do you crystallise your losses but you also risk missing out on all or part of the subsequent rebound when markets recover. The important thing for members to remember is that growth funds are generally designed to beat inflation by 3.5% a year, which translates to about 6% per annum over the long term, and they've succeeded in achieving that objective over the medium and long term."

Over the last 15 years the top performing growth super funds were Hostplus Balanced, AustralianSuper Balanced and Cbus Growth all with average returns of 7.9% p.a.

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Image: Shutterstock
Graph: Supplied by Chant West

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