Vanguard delivers double-digit returns, Rest comes just shy

Rest and Vanguard both reported solid returns as global equities continue to underpin portfolio performance despite ongoing market volatility.

Rest's flagship MySuper Growth option returned 9.81% for the year to June 30, marking the fourth consecutive financial year of positive returns. Rest said the result was driven by strong international equity markets alongside contributions from the fund's private equity and infrastructure portfolios.

The profit-to-member fund said the result exceeded the options to outperform its long-term investment objective of CPI plus 3% over rolling 10-year periods.

Rest chief investment officer Michael Clancy said the outcome reflected Rest's long-term investment approach.

"I'm pleased we've continued to deliver such strong investment returns over the past 12 months for Rest's more than 2 million members," Clancy said.

"Rest's overseas shares portfolio was a key driver of positive absolute returns...Our private equity portfolio was also a particularly strong contributor."

Clancy said the funds infrastructure investments also benefited from increased demand for digital infrastructure and the global energy transition while cautioning that geopolitical tensions, inflation and artificial intelligence would continue to drive market volatility.

Meanwhile, Vanguard Super's Lifecycle option returned 12.29% for members aged 47 and under, delivering its third consecutive year of double-digit returns.

The default MySuper option has generated annualised returns of 13.21% since launching in October 2022, while members invested in Vanguard's high Growth diversified option received 12.14% for the financial year.

Vanguard Asia Pacific chief investment officer Duncan Burns said global equities had again supported returns despite periods or market uncertainty.

"While markets experienced periods of volatility, strong performance from global equities supported returns over the past financial year," he said.

"After a strong run in markets, members should keep their expectations grounded and stay focused on their long-term goals rather than market noise or headlines."

Vanguard also reported continued growth in its super business, with assets under management surpassing $6 billion, up from $3.2 billion a year earlier. The fund attributed its momentum to strong investment performance alongside its low fee proposition, with more than half of members