Super funds return more than 10 per cent again despite rollercoaster financial year

Retirement nest eggs grew more than 10 per cent in the just-completed 2025 financial year, despite a rollercoaster ride that threatened to leave superannuants underwater just three months ago.

Numbers released by superannuation research firm SuperRatings on Thursday show the median balanced fund - one with between 60 per cent and 76 per cent of balances exposed to shares and other growth assets - is estimated to have returned 10.1 per cent in the 2025 financial year, after adding 1.4 per cent in June.

The growth has been attributed to gains by big US tech companies and Australia’s banks, notably Commonwealth Bank, and represents the third double-digit return for Australian superannuation funds in the past 10 years.

It’s consistent with the 9.9 per cent rise in the S&P-ASX200 for the 12-month period.

However, returns could have been even better if not for US President Donald Trump’s tariffs, which hammered investor confidence and sparked savage sell-offs on global equity markets in the second half.

The first seven months of the financial year to 31 January saw super funds delivering an 8 per cent return.

However, the gain had crashed to just 0.8 per cent by early April, all but extinguished by the announcement of the “Liberation Day” levies on US trading partners.

“We saw exceptional volatility in returns over the year, particularly following the announcement of US tariffs in early 2025,” SuperRatings executive director Kirby Rappell said.

“However, the benefit of staying the course was once again proven as a quick rebound has resulted in the third double digit return year over the past decade.”

Over the past three years, returns have averaged 10.5 per cent, well above the 10-year average of 7.9 per cent.

Mr Rappell cautioned that superannuants should still regularly review the investment settings on their accounts to take account of increased risk while tempering any expectations of similar returns every year.

“Despite the strong performance over the past three years plenty of risks remain,” he said.

“Geopolitical tensions and cost of living pressures haven’t disappeared, and we suggest members remain alert to market conditions and review their longer-term settings, such as whether they are in the most appropriate investment option for their situation,” he said.

“Overall it’s been another fantastic year for Australian’s retirement balances and members should celebrate these returns.

“However, expectations that similar returns will continue in the coming years should be tempered with markets currently sitting at record highs.”

AMP Capital chief economist Shane Oliver warned superannuants should be wary of changing to more conservative investment settings after equities have been hit, urging adherence to “sound long-term investment principles”.

“Short term forecasting and market timing is fraught with difficulty and it’s best to stick to sound long term investment principles,” Dr Oliver said.

He said periodic and often sharp setbacks in shares were normal, so “selling shares or switching to a more conservative superannuation strategy after falls just turns a paper loss into a real loss”.

He said Australian shares still offered an attractive dividend yield and invariably bottomed when most investors were bearish.

“During periods of uncertainty, when negative news reaches fever pitch, it makes sense to turn down the noise around and stick to an appropriate long term investment strategy.”

Dr Oliver is tipping “more constrained returns” 6 per cent to 7 per cent over the 2026 financial year.