Pension fund returns capped off a strong 2026 financial year, with the median Growth fund (61–80% in growth assets) up 1.4% over the month and 10.8% for the year.
All pension fund risk categories finished the financial year in positive territory, extending a strong run of returns despite ongoing tensions in the Middle East and lingering inflation concerns.
Chant West’s Head of Superannuation Investment Research, Mano Mohankumar says the strong FY26 result has been driven largely by international shares, which returned 25.5% in hedged terms and 17% unhedged, supported by continued enthusiasm for AI and robust corporate earnings. Australian shares returned a more modest 6.2%. The only asset class to finish in negative territory over the year was Australian listed property, down 1.8%.
The experience over the past financial year is a timely reminder for members to focus on the long term, stay the course and ignore short-term market noise.
The table below shows median pension fund performance across various timeframes for five investment categories to the end of June 2026.
Pension fund performance (results to 30 June 2026)
| Risk category (% growth assets) | 1 mth (%) | 3 mths (%) | CYTD (%) | 1 yr (%) | 3 yrs (% per yr) | 5 yrs (% per yr) | 7 yrs (% per yr) | 10 yrs (% per yr) | 15 yrs (% per yr) |
|---|---|---|---|---|---|---|---|---|---|
| All Growth (96–100%) | 1.9 | 9.9 | 6.1 | 14.2 | 14.7 | 9.7 | 10.1 | 10.5 | 10.5 |
| High Growth (81–95%) | 1.5 | 7.9 | 4.7 | 11.5 | 12.2 | 8.6 | 9.6 | 10.2 | 10.1 |
| Growth (61–80%) | 1.4 | 6.8 | 4.7 | 10.8 | 10.6 | 7.2 | 8.1 | 8.7 | 8.8 |
| Balanced (41–60%) | 1.2 | 5.4 | 3.9 | 8.7 | 8.8 | 6.1 | 6.5 | 7.0 | 7.4 |
| Conservative (21–40%) | 1.0 | 3.9 | 3.3 | 6.5 | 7.0 | 4.6 | 4.8 | 5.1 | 5.7 |
Source: Chant West. Performance is shown net of investment fees and tax, before administration fees and adviser commissions.
Tax-free returns
Despite holding the same underlying investments, pension fund returns tend to be roughly 10–15% higher than returns for the same category in accumulation phase over the long run. The difference is due largely to tax, as investment earnings are not taxed in retirement phase.
For example, over the last 15 years to 30 June, pension Growth funds returned 8.8% per year, on average, while the accumulation equivalent returned 7.9% – a difference of 0.9%.
Conversely, when returns are negative, pension funds typically generate slightly bigger losses in the short term than accumulation funds in the same category. For example, in March 2026 the median return for pension Growth funds was -3.5%, compared with -3.2% for the accumulation equivalent.
Mohankumar says this is because accumulation funds get a deferred tax benefit when returns are negative.
Although people tend to be more risk averse as they get older, he says most retirees are still invested in their pension fund’s Growth option, where most accumulation members are also invested. For example, he says that in large industry funds, such as AustralianSuper and UniSuper, most pension fund members are in the Balanced option (with an investment mix that aligns with Chant West’s Growth category). Even so, he says a meaningful number would also be invested in the next risk category down, in line with Chant West’s Balanced category with 41–60% growth assets.
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Find out moreRetirees in retail pension funds (and some industry pension funds) are most likely to be invested in a Lifecycle investment option with a conservative investment mix. Lifecycle funds automatically shift members into a lower-risk investment mix as they age.
Over the long term, though, the advantage of holding a meaningful level of growth assets is clear.
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