Retail funds outperform industry peers in FY26 super returns

While most funds fell short of the exceptional returns recorded in FY24-25, retail funds generally outperformed their industry peers on headline returns, led by Colonial First State’s 12.74 per cent MySuper growth return.

Among industry funds, UniSuper and Rest topped the major diversified options with 12.3 per cent and 9.8 per cent Growth return (respectively), while Australia’s two largest super funds both delivered positive but more subdued results.

Australia’s biggest funds post solid returns

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AustralianSuper, which is Australia’s biggest super fund with over $410 billion in assets, reported higher returns than the previous year.

AustralianSuper returned 9.7 per cent in its Balanced option and 11.5 per cent in its High Growth option, compared with 9.5 per cent and 10.6 per cent respectively in FY24-25. AustralianSuper chief investment officer Shaun Manuell said the result came after a year marked by global uncertainty.

“This is a strong result and a great outcome for members. Strong long-term performance is what makes the biggest difference to members in retirement.”

Meanwhile, Australian Retirement Trust (ART) returned 7.9 per cent in its Balanced pool and 9.2 per cent in its High Growth pool, down from 11.2 per cent and 11.9 per cent the previous year.

ART chief investment officer Ian Patrick said the fund remained focused on long-term outcomes rather than short-term market movements.

“Over the past decade, we’ve delivered consistently strong returns for members, reflecting the discipline of our long-term investment strategy. We remain focused on a diversified strategy that aims to grow our members’ retirement savings over time.”

Industry funds remain resilient

Among the major industry funds, Rest delivered the strongest flagship diversified result, maintaining its Growth option at 9.8 per cent while improving its High Growth option to 11.7 per cent.

HESTA’s MySuper Balanced Growth option returned 9.4 per cent, Cbus’ Growth option delivered 9.2 per cent and Aware Super’s flagship High Growth option returned 8.5 per cent.

HESTA said international sharemarkets helped add around $10 billion collectively to members’ balances through savings and investment returns during FY26, while its MySuper Balanced Growth option recorded a fourth consecutive year above 9 per cent.

“Our considered, diversified approach helped us deliver a strong financial year result for our more than one million members amid a challenging geopolitical environment,” chief investment officer Sonya Sawtell-Rickson said.

Rest chief investment officer Michael Clancy said global equities and private markets had again driven performance.

“Markets are being buffeted by short-term cyclical changes, such as oil price movements and interest rate cycles, and long-term structural changes, such as geopolitical forces and step-change AI productivity opportunities and disruptions.”

Aware Super head of investment strategy Michael Winchester said remaining invested had continued to reward members over the long term.

“Super is a long-term investment and long-term thinking matters. Our High Growth option has compounded at more than 9 per cent per annum over a decade, or a total investment return of 150 per cent.”

Cbus chief investment officer Leigh Gavin also pointed to diversification as the key contributor to returns.

“It has emphasised the importance of staying invested, and really shown the success of our diversified investment model.”

Retail funds lead the performance tables

Retail funds generally posted the strongest headline returns across the sector.

Colonial First State (CFS) led the major retail funds, with its FirstChoice Employer Super MySuper Growth fund returning 12.74 per cent and its Balanced equivalent returning 10.81 per cent.

AMP followed with a 12.1 per cent return from its Future Directions High Growth option, while MLC’s High Growth option returned 10.2 per cent.

Mercer Super also recorded a fourth consecutive year of double-digit returns, with its SmartPath default lifecycle cohorts for members aged between 18 and 52 returning between 10.0 per cent and 10.6 per cent.

“We know our members are looking for confidence and consistency, particularly in an environment of heightened global volatility. Our results this year again reflect a strong focus on delivering outcomes for our members, supported by a disciplined approach to investing,” CFS chief executive Kelly Power said.

Mercer Super chief investment officer Graeme Miller said the fund’s global diversification had helped members navigate another volatile year.

“Our investment strategy, underpinned by Mercer’s global investment perspective and insights, has steered a steady course for our one million members, during a period of significant economic and geopolitical volatility.”

 AI and diversification continue to drive returns

Despite a more volatile year, investment leaders across both industry and retail funds pointed to the same themes underpinning performance.

AustralianSuper said listed equities, particularly those benefiting from artificial intelligence, alongside private equity and private credit, drove returns.

ART said global sharemarkets were the strongest-performing asset class while its growing allocation to private markets continued supporting long-term outcomes.

CFS chief investment officer Jonathan Armitage said AI was creating new investment opportunities beyond developed markets.

“We’re seeing new opportunities emerge as the development and deployment of technologies such as AI gathers pace, particularly as adoption grows among developing economies.”

MLC chief investment officer Dan Farmer said equities, alternatives and private credit all contributed strongly during the year.

“This financial year’s returns have been driven in large part by equities but also strong performance in alternatives and private credit.”

Although most funds reported lower returns than FY24-25, executives across the sector said diversified portfolios, structural investment themes and long-term discipline remained central to delivering retirement outcomes as geopolitical risks and artificial intelligence continue reshaping global markets.