Vanguard, CFS deliver strong FY25 returns

The two retail superannuation funds delivered strong returns for members, but it was the low-cost, indexed-based strategy that outmuscled the other.

Vanguard Super returned 13.5% p.a. for 2025 financial year for members aged 47 and under. Since its inception nearly three years ago, Vanguard Super's default MySuper Lifecycle product has achieved 13.6% p.a.

Those in the 48- to 54-year-old bucket achieved between 12% p.a. and 13.2 p.a. Members aged between 55 and 62 earned between 10.2% p.a. and 11.8% p.a.

At the option level, High Growth Diversified delivered 13.5% p.a. for the year, while the Growth and Ethically Conscious Growth Diversified made 11.8% p.a. and 12.6% p.a. respectively.

The International Shares option turned in 16.7% p.a. while Australian Shares returned 13% p.a.

Vanguard Asia-Pacific chief investment officer Duncan Burns said the low-cost, index-based approach to superannuation is continuing to deliver strong outcomes for members.

"The 2024-25 financial year was a tale of two halves. The year began on a relatively stable note, while the second half saw periods of market volatility, which is a normal part of long-term investing," he said.

"Superannuation is a long-term investment, and it's important for Australians to maintain a long-term perspective."

Vanguard Super has $3.2 billion in retirement savings managed on behalf of more than 31,000 members.

Meanwhile, Colonial First State's (CFS) confirmed that two of its MySuper Lifestage options delivered above 11% p.a. while the results for other life stages are being finalised.

The FirstChoice Employer Super growth fund (MySuper Lifestage 1975-79) delivered 12.8% p.a. while the FirstChoice Employer Super balanced fund (MySuper Lifestage 1965-69) made 11.4% p.a.

While the returns for Lifestage options for younger members who were born after 1980 are not yet finalised, based on May 2025 results they appear on track to achieve about 13% p.a.

CFS chief investment officer Jonathan Armitage said global and domestic equities were a key driver of returns over the year.

"We have also benefited from the recent additions of emerging market equities and increasing the hedging ratio of global equities," he said.

"Pleasingly, following three consecutive years of double-digit returns we have been able to significantly improve performance over both three and five-year periods. This achievement underscores our commitment to delivering consistent value to our members."

CFS has a total of $168 billion in funds under management.

"Despite the rebound, uncertainty remains elevated. This highlights the volatile nature of the current market environment. As we anticipated, investment returns are now starting to come back down to more normalised levels but remain higher than long running averages," Armitage said.