What’s a good annual return on super?

Man uses his telescope to look beyond as he stands on an arrow of good super annual returns

In good news for Australian superannuation members, the median return generated for growth funds for the financial year 2022/2023 was 9.2% according to a report by Chant West. 

While this strong financial result is excellent, Chant West Senior Investment Research Manager, Mano Mohankumar says that this kind of annual return on super isn’t typical. Generally the goal of growth funds is to beat inflation by 3.5% p.a. and provide long-term returns of over 6% p.a.

Super funds have traditionally done more than reach the typical target, data by Chant West showed. Super has delivered members a 7.4% p.a. average return for the last 20 years despite some global economic pressures. 

Here is a chart which demonstrates growth fund performances in the decade leading up to 30 June 2023 that you can check out:

Chart displaying growth fund performances for super in the decade leading up to 30 June 2023.

Do note though, that investment returns are not guaranteed, and any past performance is not an indicator of future performance.

What to do if your super fund is performing below the median?

If your fund is performing below the median it could be time to consider changing funds or investment split, but be sure to look at the long-term performance of your super fund. 

It might be tempting to change super funds if you’ve experienced a year of lower than average returns. However, Mohankumar says that members might want to remember that super is a long-term investment. 

Continually tracking the performance of your super fund can be a good investment of your time, potentially allowing you to end up with more in your fund. So, if you want to improve your super knowledge, why not visit our superannuation guides hub to learn more.