Which super funds outperformed during the COVID crash?
A Queensland super fund has come out on top over the last year with the latest comparisons showing many funds have navigated the COVID-19 financial crisis better than expected.
As superannuation funds finalise reporting for the end of the financial year, the fallout from the crisis seems far from the sea of red many predicted.
According to data from SuperRatings, Suncorp was the top returning fund over the 12 months to the end of June, with its Suncorp Multi-Manager Growth Fund returning 3.8 per cent.
This was followed by BUSSQ and Australian Ethical Super, whose balanced options returned 2.5 per cent and 2.4 per cent respectively according to SuperRatings.
For members invested in any of the top 15 performing balanced options, the past year has netted a slim but positive return compared to the estimated median return of -1.2 per cent.
Looking further ahead local fund QSuper delivered the best return to risk ratio of its peers over the seven years to 30 June 2020, according to SuperRatings.
While CareSuper, Cbus, MTAA, VicSuper and AustralianSuper delivered a higher return over this period, they did so at a slightly higher level of risk.
Over 10 years, the top performers were AustralianSuper, whose balanced option has returned 8.8 per cent per year, followed closely by UniSuper and Hostplus.
According to SuperRatings, given the success of super over the past 10 years in accumulating wealth, members will feel the bumps more when markets go down.
"Prior to Covid-19, we saw the industry average account balance rise over $100,000, compared to around $30,000 during the GFC," SuperRatings executive director Kirby Rappell said.
"This means that, on an absolute basis, members will see their balance move around a lot more than they have previously.
"Funds have done an excellent job of both managing risk and educating their members on these issues, but more can be done in this space."
Chant West also named the Suncorp Multi-Manager Growth Fund as the best performing in the category over the last year.
It listed Australian Ethical Super Balanced as taking out second spot with a return of 2.8 percent with BUSSQ Balanced Growth recorded 2.5 per cent.
"A key reason for the better than expected financial year result is that our super funds are so well diversified in their investment portfolios," Chant West senior investment manager Mano Mohankumar said.
"In fact, nearly half the funds in our growth category managed to generate a positive return, albeit a small one, despite the worst economic conditions since the GFC."
He said the better performing funds over the year were generally those that had lower allocations to Australian shares and higher allocations to international shares and bonds.
"Funds would also have benefited from having low exposure to listed property and listed infrastructure," he said.
Originally published as Which super funds outperformed during the COVID crash?