The total size of Australia’s superannuation is staggering.

Key points:

• The average super fund returned 15.2 per cent, while the typical balanced fund grew by 13.8 per cent in 2019
• Those returns are the best since 2013
• Analysts say lower interest rates, partly initiated by Donald Trump’s trade war with China, were a major factor in the growth

“We’ve got the equivalent of three football stadiums of $100 bills,” the chief executive of the Association of Superannuation Funds of Australia, or ASFA, Martin Fahy observed.

The total pool of Australian superannuation has now hit $3 trillion and last year, at 15.2 per cent, it produced the best return, on average, since 2013.

“Over a 15-year period we would typically expect funds to return 5, 6 maybe 7 per cent, but we’ve had extraordinary results mainly driven by the outstanding performance of both international and domestic equities,” he said.

Figures from SuperRatings show the median, or typical, balanced fund produced a slightly lower return of 13.8 per cent last year, but that was still the best in six years. Mr Fahy said Australia’s financial markets were relatively small so, in an effort to stretch returns, local fund managers were investing more of their clients’ super in international markets, including the US.

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