July 22, 2024

Superannuation funds delivered 9.6% return in 2023 but it was a bumpy ride

After a bruising 2023, Aussies have something to smile about, with retirement savings increasing by nearly 10 per cent over the past 12 months, outpacing the rate of inflation and withstanding market volatility.

The median balanced superannuation fund is expected to return 9.6 per cent for the year, according to new data released by SuperRatings.

A balanced option is one with 60 to 76 per cent invested in growth assets over the long term, including areas like Australian shares, international shares, property, alternatives, fixed interest and cash.

Composite image of retirement savings and Australian money. Superannuation savings.

Aussies’ superannuation savings recovered in 2023, after experiencing a dip in 2022. (Source: Getty)

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SuperRatings executive director Kirby Rappell said this was a “strong return to form” after a 4.8 per cent loss reported in 2022.

“Global markets accounted for the majority of 2023’s gains, driven by rising technology shares in the US and supported by strong returns from Australian shares and rising cash returns, off the back of central banks raising rates,” Rappell said.

“The only sector unlikely to contribute to the rebound is property, which saw a correction during the year and will likely finish 2023 as a small drag on overall returns.”


While the 2023 result was positive, Rappell said it was “far from a smooth ride”, with returns swinging up and down throughout the year.

“Negative monthly returns were reported in five out of the 12 months in the year. This trend is likely to continue and illustrates the need for members to stay focused on the long term,” he said.

The 2023 result marks the 10th-highest return since 2000. Long-term returns remain strong, with SuperRatings estimating a median return of 6.5 per cent per year since 2000.

“While we see inflation slowing into 2024, as the impact of the interest rate rises throughout 2023 softens consumer demand, markets are expected to remain sensitive to local and global events,” Rappell said. “However, as this result illustrates, it has literally paid for members to focus on the long term in 2023.”

Australia’s latest inflation rate eased to 4.9 per cent in the 12 months to October 2023, down from 5.6 per cent in September.

Top 10 performing super funds

While returns for individual funds for 2023 are not yet available, SuperRatings has listed the top 10 balanced funds for performance for the year to September 30, 2023.

The top-performing super fund was ESSSuper, a dedicated super fund for emergency services and Victorian government employees, which had returns of 13.03 per cent for the year.

Here are the top 10:

  1. ESSSuper Accum – Balanced Growth – 13.03%

  2. Hostplus – Indexed Balanced – 12.13%

  3. Brighter Super Optimiser Accumulation – Multi-Manager Growth Fund – 11.70%

  4. Aus Food Super Emp – Balanced – 10.84%

  5. Vision SS – Balanced Growth – 10.76%

  6. Aware Super Future Saver – Balanced – 10.29%

  7. TWUSUPER – Balanced – 10.17%

  8. UniSuper Accum (1) – Balanced – 10.15%

  9. IOOF Employer Super Core – IOOF MultiSeries 70 – 10.09%

  10. HESTA – Balanced Growth – 10.07%

Rappell encouraged members to think about their risk.

“Most funds will have a calculator on their website where you can learn about how much risk you are willing and able to take,” he said.

“Focusing on this measure and setting course accordingly, with the help of experts that can guide you to consider important factors of your circumstances, is likely to provide confidence throughout the shifting markets we are currently experiencing.

“Setting a plan for the long term and sticking to it is most likely to support strong long-term outcomes.”

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