Superannuation fund returns have entered 2025 on a positive trajectory, with fresh analysis from Chant West highlighting a solid start to the year.
According to the specialist superannuation research and ratings firm, the median growth fund (comprising 61% to 80% growth assets) delivered a 2.2% return in January, building on the previous financial year’s robust 11.4% gain.
Chant West’s Senior Investment Research Manager, Mano Mohankumar, attributed the strong performance to buoyant domestic and international equity markets, which collectively account for roughly 55% of a typical growth fund’s portfolio.
“European equities led global markets in January, while the U.S. lagged behind most developed economies,” Mohankumar noted. “Donald Trump’s inauguration for his second presidential term in mid-January bolstered U.S. market sentiment, fueled by his ‘America First’ policy agenda. However, investor confidence wavered late in the month as Trump’s tariff threats unsettled markets.”
Adding to the turbulence, the U.S. tech sector faced headwinds after reports emerged that Chinese startup DeepSeek had developed a generative AI model capable of rivaling market leaders at a significantly lower cost.
Despite these concerns, developed international markets posted solid gains, with hedged and unhedged returns of 3.4% and 2.7%, respectively. Australian equities outperformed, climbing 4.5% due to a lower AI-sector weighting and greater exposure to financial stocks. In contrast, emerging markets lagged, returning just 1% amid tariff uncertainty. Bond markets remained relatively stable, with Australian and global fixed income delivering modest returns of 0.2% and 0.4%, respectively.
Looking at the broader picture, Mohankumar emphasized that superannuation performance remains ahead of long-term targets.
“Since compulsory superannuation was introduced in July 1992, the median growth fund has delivered an 8% annual return, significantly outpacing the 2.6% average CPI increase and achieving a real return of 5.4% per annum—well above the typical 3.5% benchmark,” he said. “Even over the past 20 years, which included major downturns such as the Global Financial Crisis, the COVID-19 shock, and the high inflation and rising rates of 2022, super funds have maintained a strong annualized return of 7.2%, comfortably exceeding their objectives.”
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