Sure, winning isn’t everything, but it sure is nice!

And if you know your super fund is one of the best performing in the country, you’re feeling smug knowing you’re winning the retirement game (this year).

And if that’s not you, understanding a bit of context on super trends could very well see you in the winning spotlight too.

First, here’s the 2023 super down low

2023 was a comeback year for superannuation funds, where the typical balanced super option generated a 9.6% return. And that’s strong - because it rebounded from a 4.8% loss in 2022.

Super funds have on average returned around 8% over the last 40 years.

But that’s just on average; the highest performing superfunds can generate up to two to three times greater returns than the lowest performing superfunds.

In fact, a high performing super fund could see your super investment tripled, and suddenly, you’re living it up, spending your retirement savings on worldwide cruises and bougie 5-star hotels.

‍Growth vs. Balanced options

When we choose a super fund, there’s not just a variety of funds, but also a variety of investment strategies available within each fund (yep, Inception vibes). In the simplest way, super funds are commonly split across two risk categories; growth and balanced.

Growth funds tend to offer more exposure to riskier, “growth” assets such as ASX listed shares or international shares. 

Around 85% of the funds in a growth fund are allocated to growth assets, and around 15% of the funds towards conservative assets like cash or bonds.

On the other hand, balanced superfunds allocate more of your investment towards the “can’t go wrong” assets - like cash and bonds. 

Whereas balanced super funds allocate around 70% of the funds to growth assets, and around 30% in conservative assets.

Which investment strategy is right for me?

There isn’t a ‘right’ and ‘wrong’ strategy because it depends on your risk appetite. The growth funds generally grow quicker… but also can fall harder.

Generally, people closer to retirement age opt for balanced superfunds to keep their retirement savings as safe as possible. 

And younger people, who have more working years in their life are better able to ride economic ups and downs, so they’re more likely to opt for growth funds.

Top performing growth superannuation funds in 2023

These are the funds with 77% - 90% of their investments in ‘growth’ assets

‍Top performing balanced superannuation funds in 2023

These are the funds with 60% - 76% of their investments in ‘growth’ assets

In 2023, given the strong performance in the share market, the funds that performed better were ones with higher allocations towards shares, particularly international shares, which returned 23% over the year. 

Growth in the tech sector played a big role in this growth.

But, looking at just the performance of funds in 2023 doesn’t tell us the full story, as ultimately, super is a decades-long investment. 

Best performing balanced/growth superannuation fund in the 10 years to Dec 2023

Given super is a long, LONG term investment, it’s more important to focus on long-term returns over annual returns to understand which funds are the best performers.

If these lists have got you itching to get on top of your super, check out the Flux Academy on Superannuation which covers all you need to know about how to actually research superannuation funds.