What’s driving the performance of your super?

Many Australians are confused about their super, with some only thinking about it when they near retirement age. But understanding what drives strong super performance is critical to ensuring you’ll have enough when you need it. 

Fortunately, two in three Australians (64%) have actively reviewed the performance of their super, and 36% did so in the past year according to a recent survey of 2,250 Australians on financial literacy and super performance conducted by CFS.^ 

But 36% have never done so. And even among those who do actively review their super, one in three find it difficult to understand how it’s performing.

As statements are being sent out this month, it’s a great time to ensure you understand what affects the performance of your super.  

The performance of your super, which accumulates while you’re working and into retirement, refers to how much money your super is earning for you each month, quarter or year. It is affected by things like:

• the type of investments your money is invested in
• your super fund’s investment strategy
• the fees you pay. 

Reading your super statement is a great way to understand what’s driving your super’s performance. You can access your statement via FirstNet if you’ve registered and opted in to receive statements electronically. Otherwise, look out for it in your mailbox.

Check out our Statement hub for guidance on how to read your super statement.

Your super fund invests your money for you. If the investments perform well, then you make money in the form of investment returns. You can choose which options your super is invested in.

When money goes into your super account, you're actually buying units in your chosen investment option. 

The unit price is the value of one unit of an investment option, and there is a unit price for each investment option. These are calculated daily. 

The value of your interest in an investment option can go up and down over time.

Owning these investments in your super provides a tax-effective environment in which to invest over the long term. 

In super, a member’s returns are generally taxed at rates of up to 15%, which is better than most people’s marginal tax rate. That money then compounds over time to make you more money. 

The types of investments in which your super is invested will affect the annual return on your super, and therefore how your super performs.

Super funds often offer pre-mixed investment options that include a range of different investment types. 

The proportion of growth to conservative investment types in these pre-mixed options generally determines the level of risk, as well as how high the return is likely to be.

High growth options will generally offer higher returns than growth and balanced options, while conservative options offer lower returns, but with less risk of a potential loss.

There’s no ‘right’ way to invest: think about what your objectives are, how long your super will be invested, and the level of risk you might be willing to tolerate. 

What is your risk appetite? Check out our risk profiler to read more. Or learn more about investing.

Performance is measured in terms of growth by percentage. Returns are generally shown in 1, 3, 5, 7, 10 and 20-year increments.

If the money invested in an option grew by 20% in one year, it would be listed as a 20% return for one year. If it grew 20% one year and 0% the next, the two-year return would be listed as 10%.  

While past performance may provide a guide to an option’s history, it is not an indicator of how that option would perform in the future. 

Generally super can be expected to average returns of around 6% a year: the five-year average annualised rate of return for super funds with more than six members was 6.4% to March 2024, according to the Association of Superannuation Funds of Australia. 

CFS gave most super members double-digit returns in financial year 2023-24. Learn more about how CFS performed or track your investment option’s performance online. 

The fees you pay can affect your super balance, and how quickly your money grows. 

All fees and costs charged to members must be listed on your statement. 

These include fees deducted directly from your account and fees and costs deducted from your investment options. 

They may include: administration fees, which cover the cost of operating the fund; investment fees and costs, which relate to the investment of the assets of a super fund and include indirect costs paid by your super fund to third-party providers, such as investment managers; insurance premiums; and advice fees.

CFS members pay among the lowest admin fees* in the market. 

Learn more about fees in super.

Statement time is not only a great time to understand how your super performed, it’s also a great opportunity to check in and see if the amount you’re projected to have is in line with the kind of retirement you would like. 

Check out our retirement calculator for more information. CFS also has a dedicated guidance team that can help you with any questions you may have.