It was the best performance from superannuation funds in 34 years and the Rainmaker Default MySuper Index was up 18 per cent, after all fees and taxes.
The result was only bettered by the result just before the 1987 stock market crash in 1986-87 when the return was 19 per cent.
Rainmaker said the main driver of the result was the 33 per cent return from listed property. Also helping was the 28 per cent return from both Australian and international shares and 20 per cent from global infrastructure.
Offsetting this were lacklustre financial year returns of 3.6 per cent from unlisted direct property, 0.2 per cent from international bonds, zero from cash, and -0.8 per cent from Australian bonds.
Rainmaker executive director of research and compliance Alex Dunnin said the returns meant Australia’s 13.5 million super fund members earned $520 billion in investment earnings in the past 12 months, or almost $39,000 each.
“To get a sense of how large these investment earnings are, this is three-times the amount of all the money everyone contributed into their superannuation accounts through the year, six-times the amount of all the compulsory Superannuation Guarantee contributions or 17-times what was paid in fees,” he said.
“Terrific returns from Australian and international shares and listed property, asset classes more favoured by retail super funds than not-for-profit (NFP) super funds, explains why the retail superannuation segment is now outperforming.
“Reinforcing this, unlisted and direct property, being an asset class that has generally been the backbone of why not-for-profit funds have performed so strongly over the long-term, has delivered only meagre returns this financial year,” said Dunnin.
He said despite record MySuper returns, the ESG outperformance seems to have halted.
“Up until February this year, Rainmaker’s ESG superannuation indexes were regularly outperforming the standard indexes by at least 1 per cent a year.
“But now the situation has reversed. By 31 May 2021, the Rainmaker Diversified ESG Superannuation Index was tracking 1.6 percentage points behind the standard index over the 12 month period,” said Dunnin.