Superannuation funds deliver 9.1 percent return for FY24
International shares were the biggest contributor to surprisingly strong gains
2 min
Strong share markets in Australia and overseas drove better-than-expected returns for superannuation growth funds in FY24, according to Chant West. The median growth fund, which comprises 61 percent to 80 percent growth assets likes shares, returned 9.1 percent in FY24. This was virtually a mirror performance of FY23 when the median superannuation growth fund returned 9.2 percent.
Chant West Senior Investment Research Manager, Mano Mohankumar, said FY24 was the 13th positive year for superannuation returns over the past 15 years. “The return experience over the past two years in the face of much uncertainty is another reminder of the importance of remaining patient and maintaining a long-term focus,” he said. “… FY23 kicked off amid surging inflation and uncertainty around when interest rate hikes might come to an end. At that time, I don’t think anyone could have forecast a 19 percent return over the subsequent two years and the small FY22 loss of 3.3 percent now seems like a distant memory.”
Mr Mohankumar said international shares were the biggest contributor to superannuation returns in FY24. As a group, international shares soared by 21.5 percent. The growth of overseas stock values was led by the American technology sector, with Magnificent Seven member Nvidia once again delivering astounding share price gains of 192 percent in FY24. Australian shares delivered total returns of 11.9 percent (including dividends) over FY24.
All major asset classes except unlisted property delivered positive returns in FY24, according to Chant West’s data. Australian listed property outshone international real estate with an impressive 23.8 percent return in FY24. International listed property returned 4.6 percent. High interest rates saw cash investments return a median 4.4 percent. Australian bonds returned 3.7 percent and international bonds returned 2.7 percent.
Unlisted property was dragged down by the office sector, with revaluations of buildings trending lower now that more people are working from home permanently following the pandemic. This has affected the demand for office space worldwide. In Australia, the average office occupancy rate is 76 percent of pre-pandemic levels, while US occupancy rates are about 50 percent, according to CBRE research.
Superannuation funds that had a higher allocation to shares and other growth assets outperformed the funds with balanced and conservative strategies, which are popular with pre-retirees. ‘All growth’ superannuation funds, which have a 96 percent to 100 percent allocation to growth investments, delivered a median 12.7 percent return in FY24. Balanced funds, which have a 41 percent to 60 percent allocation to growth assets, returned 7.4 percent. Conservative funds, which have just 21 percent to 40 percent in growth assets and higher allocations to defensive investments such as bonds, fixed income and cash, delivered 5.5 percent.
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Australian shares fell on Thursday as Wall Street weakness, rising oil and persistent rate concerns weighed on most of the market. The S&P/ASX 200 declined 0.72 per cent to 8,702. The All Ordinaries lost 0.66 per cent to finish at 8,897. Mining stocks were hit particularly hard, while real estate also dragged on the index. …
Continue reading “ASX falls 0.7 per cent as miners and property stocks retreat”
2 minAustralian shares fell on Thursday as Wall Street weakness, rising oil and persistent rate concerns weighed on most of the market.
The S&P/ASX 200 declined 0.72 per cent to 8,702. The All Ordinaries lost 0.66 per cent to finish at 8,897. Mining stocks were hit particularly hard, while real estate also dragged on the index.
Energy was the notable exception, gaining more than one per cent as Brent crude traded above US$103 a barrel. Oil had moved higher amid uncertainty surrounding potential US diesel-export restrictions and broader geopolitical supply risks. The move supported energy producers but renewed concern about inflation inputs across transport and the wider economy.
Gold shares were weak even as spot bullion remained historically elevated. The All Ordinaries Gold index fell about 2.25 per cent, showing that equity performance can diverge from the commodity because of valuation, currency, operating and company-specific factors.
Zip was a prominent loser, falling 11.38 per cent after the company reported short sales after the previous close. Nine Entertainment also weakened after UBS analysts warned of near-term revenue challenges associated with its advertising-supported subscription tier.
Premier Investments led larger winners despite caution about the retail environment. Breville, in which Premier owns a significant stake, also appeared among leading movers. In the broader ASX 300 screen, Myer gained 11.43 per cent and MAAS Group rose 7.93 per cent, while Lotus Resources fell 10.53 per cent. These percentage moves should be checked against company announcements and trading liquidity before attributing causes.
The Australian dollar was broadly flat at US70.38 cents. Spot gold was around US$4,280 an ounce, Brent crude approximately US$103.08 a barrel and iron ore near US$96.90 a tonne late in the session.
The rate outlook remains the central domestic catalyst. Labour-market weakness has not eliminated the possibility of an RBA increase next week, leaving banks, listed property and other rate-sensitive sectors exposed to changing expectations.
Market dashboard
S&P/ASX 200: 8,702, down 0.72 per cent.
All Ordinaries: 8,897, down 0.66 per cent.
Best sector: Energy, up more than one per cent.
Weakest areas: Real estate and materials were the major drags; confirm final sector percentages before publication.
Material winner: Premier Investments led the large-company gainers. Confirm its final closing move from the ASX before publication.
Material loser: Zip, down 11.38 per cent.
ASX 300 percentage leader: Myer, up 11.43 per cent.
ASX 300 percentage laggard: Zip, down 11.38 per cent.
AUD/USD: Approximately US$0.7038, broadly flat.
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