Bull market buoys super funds' 2024 returns

Superannuation funds turned in double-digit returns for the 2024 calendar year thanks to the bull market, according to the Association of Superannuation Funds of Australia (ASFA), with some achieving nearly 12% for their balanced options.

Rest's default option made a 11.19% return for 2024, the second consecutive year of positive returns.

Rest said the strong performance is largely the result of its investments in local and international equities.

Notably, the fund averaged 8.34% in annual returns since its inception in 1988, beating the ASFA's calculated average for balanced options of about 7% over a 10-year period.

Rest's high-growth option and its sustainable growth option also benefited from the strong performance of share markets, returning 14.09% and 14.08% respectively for the calendar year.

"Strong investment returns over the short-term help support our long-term investment goals," Rest interim co-chief investment officer Kiran Singh said.

"Global share markets were standout performers - especially the US - during the past year. With several central banks moving to ease monetary policy and markets responding positively, we anticipate this should continue in 2025.

"Equity valuations are elevated but, for now, they are supported by continued economic resilience and earnings growth."

Additionally, Australian Retirement Trust (ART) also leveraged international equities as a "key driver" to return 11.9% for its balanced option; its high-growth option was 13.7%.

Further, ASFA revealed high-growth options also garnered "exceptional results", with annual returns reported as high as 15%.

AMP's MySuper life stage 1970s option returned 15%, which has the highest funds under management among the other options in the stable and adopts a high-growth asset allocation.

Meanwhile, its MySuper 1950s and MySuper1960s options returned 9.8% and 11.5% respectively.

Similarly to Rest, AMP chief investment officer Anna Shelley said the investments in the US and global equities aided the positive outcomes.

"The quality of returns reflects strategic allocation and active performance by our equity and credit managers to asset classes and our overweight to stocks which we expected to perform strongly during the year, and this strategy has been successful," Shelley said.

"We've been increasing our exposure to private debt and diversified credit, which have delivered high and consistent returns.

"Our previous relatively low allocation to direct property has allowed us to increase this exposure by buying from motivated sellers at deep discounts."

Shelley also added the ground-breaking investment in Bitcoin through its Dynamic Asset Allocation program has made a "positive contribution".

Meantime, ASFA chief executive Mary Delahunty believes the resounding performances are a result from Australia's "world-class" superannuation system.

"While strong international share markets have helped propel returns over the last 12 months, it's the consistent, sophisticated portfolio construction from superannuation funds' expert investment teams that deliver terrific long-term results regardless of what is happening on the markets," Delahunty said.

"This is what our superannuation system is all about - delivering great results, year after year, to help Australians have the retirement they deserve."