The top performing super funds were released by Chant West and revealed the top ten growth funds with record results. These results have indicated the second highest return since 1996, and given the financial disruption caused by Covid, these results are quite remarkable.
While the median growth fund may have delivered a sizeable return, the differences among the best-performing investment options should be enough to prompt you to think about your options, as it could have a significant impact on your super balance by the time you retire.
In a crowded field, the ability to deliver industry-beating returns is something that we are proud to lay claim to at Mintwell. Both of our flagship portfolios delivered returns that significantly outperformed the median growth fund in FY21. Our Balanced Portfolio returned 22.5%, and our Growth Portfolio went one better, delivering returns of 24%.
In fact, when compared with the best-performing superannuation fund as judged by Chant West, which was Mine Super Growth with returns of 22.6% across the financial year, it is clear that our performance was at the very top of the charts.
For context, other well-known industry super funds such as Hostplus Balanced and Australian Super Balanced returned 21.3% and 20.5% respectively, while their average return across a 10-year timeframe sits at 9.7% per annum. At the other end of the scale, with the worst-performing fund in FY21 yielding a return of 13%, our results speak for themselves.
The story behind these results tells a tale or two. On the one hand, super members who panicked by shifting into cash, or worrying about whether the market would continue to extend its all-time highs, have likely had a year to forget – even if the result might look acceptable on paper.
The importance of treating super as a long-term investment vehicle should not be forgotten. That is central to the investment choices that have helped us achieve industry-beating returns, particularly as we favour growth stocks. Meanwhile, those fund managers that were underweight in terms of growth assets would have felt the pinch and are now facing some tough questions from their members. Nowhere is this clearer than the performance of asset classes like Australian shares and international shares, which according to Chant West surged 28.5% and 37.1% respectively in FY21.
Tying into the above theme is the importance of a portfolio manager that actively manages your super. That involves not just responding to market dynamics as they occur, but also being able to tailor your investment in a way that is attuned to your personal risk appetite and investment goals.
In our case, diversification across shares, an appetite for innovative companies, and the ability to spot defining trends have been fundamental in underpinning our returns.
When put into context amidst the sector returns for Australian shares and international shares across the industry, momentum has very much played in our favour, with our Portfolios capturing all the upside from markets as they chalked up one all-time high after another in a defining bull market.
For much of FY21 the core positions in both our Balanced and Growth Portfolios have been one and the same. It is this conviction that helped both portfolios comfortably outperform not just the median growth fund, but just about every super fund tailored towards growth.
For all the focus on last year’s results, do keep in mind that long-term performance counts for everything. Super members should be conscious of the risk that is tied to markets, which is why it pays to look at returns over the short, medium and long-term. Typical growth funds would strive to have no more than one negative return every five years, which ultimately skews returns lower over the long-run.
On that front, we are proud to have established a strong track record of outperformance compared with the median industry super fund each year since we formed our portfolios. Even in the midst of the pandemic, we were able to deliver positive growth for superannuation investors, while the rebound since has only served to accelerate returns.
If your super fund can’t make the most of one of the biggest bull runs in history, now is the time to start looking more closely at what your long-term goals are, and whether your super fund is really putting you on course to achieve them.
Financial security is in your control, you just have to take that first step towards realising it.
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Mintwell Capital Pty Ltd (ABN 13 616 609 548) is an authorised representative, AR 1254638, of AFSL Holdings Australia Pty Ltd (ABN 75 165 392 889) AFSL 460940.