The median growth super fund ended 2021 with returns of 13.4 per cent, according to new data released by Chant West, delivering the 10th consecutive year of positive returns.

Hostplus Balanced was the top-performing fund during the year with a return of 19.1 per cent, followed by Sunsuper Balanced (16.5 per cent), Christian Super My Ethical Super (16 per cent), Mine Super Growth (15.9 per cent) and TelstraSuper Balanced (15.9 per cent).

Chant West noted that even the worst-performing growth fund had a return of 10 per cent.

According to the firm, growth funds have now risen 31 per cent since the market lows of March 2020 and are currently 16 per cent higher than the pre-pandemic peak of January 2020.

“The experience over the past two years highlights the resilience of super funds’ portfolios and their ability to limit the damage when markets are weak but still capture substantial upside when markets perform strongly,” said Chant West senior investment research manager Mano Mohankumar.

“The 2021 result, in particular, is a continuing reward for those members who’ve remained patient throughout the COVID crisis.”

For the year, Australian shares were up 17.5 per cent and international shares moved 24.3 per cent higher in hedged terms.

“The better performing funds over the year were generally those that had higher allocations to listed shares, in particular international shares,” said Mr Mohankumar.

“The traditional defensive sectors such as bonds and cash were the weakest performers over the year, so keeping a low allocation to those would have helped performance.

“Cash had a return of zero while Australian and international bonds fell 2.9 per cent and 1.5 per cent, respectively.”

Chant West highlighted private equity as a standout performer among unlisted asset sectors with a rise of more than 40 per cent, while strong performance was also recorded for listed property in Australia (27 per cent) and internationally (28.6 per cent).

Mr Mohankumar encouraged super fund members to continue to think long term about their investments rather than focusing on performance during one calendar year.

“Super funds have had a tremendous year with a median return of 13.4 per cent but returns at that level shouldn’t be thought of as normal,” Mr Mohankumar said.

“The typical long-term return objective for growth funds is to beat inflation by 3.5 per cent p.a., which translates to about 5.5 per cent to 6 per cent p.a.”

Since the start of compulsory super in July 1992, Chant West said super funds had delivered a real return of 5.8 per cent p.a., well ahead of the 3.5 per cent target, based on an annualised return of 8.2 per cent and annual CPI of 2.4 per cent.

Over the past 10 years, Australian Super Balanced and Hostplus Balanced are the top-performing growth funds with returns of 10.7 per cent.

UniSuper Balanced (10.6 per cent), Cbus Growth (10.3 per cent), VicSuper Growth (10.2 per cent) and Sunsuper Balanced (10.2 per cent) round out the top-performing funds of the past decade.