A few weeks into the new financial year and reports of negative superannuation returns are rolling in. But three funds have bucked the trend to deliver modest positive returns in their balanced options for the 2021–22 year at a time when the global economy is in crisis.
The past few years have been a rollercoaster for Australian superannuation funds.
The pandemic saw returns nosedive in 2020, with median balanced options falling an average 8.9 per cent. The following year saw positive returns come roaring back, hitting record high average returns of almost 20 per cent.
Unfortunately, the dizzying highs didn’t last. The past 12 months have seen inflation explode, stock markets crash, global supply chains decimated and a military invasion for good measure.
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The economic turmoil sent average returns for Australia’s median balanced options back into negative territory.
But among the sea of red figures, three funds stood out by actually posting a profit in their balanced options – one a giant of the super industry, and two smaller players you may not have heard of.
Hostplus (1.6 per cent), Qantas Super Gateway (0.6 per cent) and Christian Super (0.5 per cent) all managed to post modest gains for 2021–22.
David Elia, CEO of Hostplus, credited his fund’s careful approach to investment for delivering a positive return in a difficult economic climate.
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“It was a very different set of circumstances we faced this financial year with global investment markets afflicted by heightened political tensions, rising inflation and rising interest rates,” Mr Elia says.
“We are therefore very pleased that our active investment style and diversified portfolio has once again delivered favourable investment outperformance for our members relative to our peers.
“Actively managing and applying a strategic asset allocation to perform under different market conditions, enables us to smooth out returns over the longer term, as opposed to some of the lower cost, passive products in the marketplace where investors are more exposed to market movements.”
As the name suggests, Qantas Super is a fund exclusively for Qantas staff members, while Christian Super is an open industry super fund that invests its members’ money in line with Christian values.
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Qantas Super attributed its result partly to energy sector investments it made during the year, largely in the US.
“Our members can be confident that Qantas Super is constructing portfolios that are well diversified and aligned with our competitive advantage in niche, capacity-constrained, alpha-orientated opportunities,” says Andrew Spence, Qantas Super chief investment officer.
Kirby Rappell, executive director of SuperRatings, said the results showed some fund managers were not prepared for the downturn after enjoying record returns over the previous decade.
“Over the past decade, we saw more emphasis on growth,” he said.
“I think we’re seeing a re-emergence of the need for an emphasis on risk and downside protection, as we get a lot more market volatility.”
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My super fund lost around 3% last year and I’m okay with that for where my life stage is at. I’m looking at the last and next 5-10 years of performance not isolating over a single year.