Super funds have seen a robust performance in 2024, driven by strong international sharemarket returns, according to the latest data from Chant West. The median growth fund achieved a significant return of 11.4 per cent, surpassing the typical long-term objective of 6 per cent.
International shares played a pivotal role in the stellar performance, recording a 21.2 per cent return on a currency-hedged basis, particularly led by the tech and financial sectors. On average, growth funds have a substantial allocation to international and Australian shares.
Australian shares also made a meaningful contribution to the strong 2024 results, returning 11.4 per cent. Additionally, other major asset classes, except unlisted property, delivered positive returns for the year, noted Chant West’s senior investment research manager, Mano Mohankumar.
Private equity and unlisted infrastructure saw gains of around 10 per cent, while unlisted property experienced a mid-single-digit loss. Listed real assets like Australian listed property and international listed infrastructure also reported positive returns.
The top-performing growth fund for the year was UniSuper, followed by CFS’ Growth option and Mine Super’s Growth offering. Vanguard Super SaveSmart Growth, smartMonday Balanced Growth, and Mercer Growth rounded out the top performers.
Over a decade, Hostplus Balanced emerged as the leading growth fund with an annual return of 8.4 per cent. However, Mohankumar cautioned that the exceptional 2024 returns should not be considered typical, emphasizing the importance of long-term return objectives.
Looking back over the past 20 years, super funds have consistently outperformed inflation, with an annualized return of 7.1 per cent, showcasing resilience through market downturns such as the GFC, COVID-19, and other economic challenges.
The industry’s strong performance in 2024 sheds light on the importance of diversification and strategic asset allocation within superannuation funds, ensuring stability and growth even in uncertain market conditions.
As super funds navigate evolving market landscapes and economic conditions, maintaining a balanced portfolio and adapting to global trends will be crucial for sustaining positive returns and meeting long-term financial goals for fund members.
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