Quarterly performance update
April to June 2024
Returns for FY24 were positive for the majority of Mercer Super members,1 despite a slight dip during the final quarter.
To read more, including detailed performance information download the full report below.
Super performance
Mercer SmartPath®
For FY24 Mercer SmartPath’s performance was positive, with returns ranging between 7.2% to 11.7%,2 with over 90% of members receiving double-digit returns for the second consecutive year.3
Mercer SmartPath outperformed many of our major competitors in FY244 with returns between 11.2% and 11.7% for members aged 18 to 55.2 This positive performance was contributed to by our higher allocation to listed shares, which helped increase the super balances of many members.
Looking specifically at Q2, the final quarter of FY24, results were mildly negative, with returns ranging from -0.1% to -0.3%.5
When looking at the long term performance - where super is best measured - members between the ages of 26 and 55 continue to benefit from top quartile investment performance, when compared against the industry returns across 1, 3, 5, 7 and 10 years.4
Mercer SmartPath vs Default Option median
(after tax and investment fees) 30 June 2024
Mercer Super Trust’s analysis of Mercer SmartPath (born 1974-1978), one of the largest cohorts based on Mercer SmartPath membership data as at 30 June 2024, and for members invested for the entire corresponding time period.
Ready-made investment options
For FY24, returns were positive for our Ready-made diversified options, between 5.7% and 11.7%.6 As expected, options with a higher exposure to growth assets generated higher returns.
Focusing on Q2 returns were mildly negative, ranging from -0.1% to -0.8%.7 However, over the longer term, these options are mostly performing above their respective peer group medians over 3, 5, 7 and 10 years.8
Economic and investment market update
Despite central banks remaining sensitive to the inflation and interest rate outlook, share markets globally reached all-time highs in Q2, and performed well throughout the entire financial year. This can be attributed to headline inflation trending downwards, enthusiasm for artificial intelligence (AI), and company earnings being better than expected.9
International government bonds produced a negative return of -0.7% for the quarter, initially declining following stronger-than-expected US inflation data before partially recovering the losses as inflation readings eased. Overall, for FY24, international government bonds returned 0.9%.
International shares produced a positive return for the quarter, returning +3.0% on a hedged basis and +0.3% on an unhedged basis, bringing the return for FY24 to +20.2% and +19.9% respectively.
Australian government bonds also produced a negative return of -1.0% for the quarter, influenced by both developments in global bond markets as well as concerns among investors as inflation in Australia remains elevated. Overall, for FY24, Australian government bonds returned 3.1%.
Australian shares returned -1.2% for the quarter, bringing the return for FY24 to +11.9%. The recovery here was less than international shares, in part due to less exposure to the technology sector.
Looking ahead
Related:
Mercer SmartPath
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1. Based on Mercer Super membership data as at 30 June 2024 and for members invested for the entire corresponding time period.
2. Mercer Super Trust’s analysis of the Mercer SmartPath investment performance (after investment fees and taxes) for the 2023/24 financial year. Mercer SmartPath default investment options achieved returns for members invested for the entire 2023/24 financial year of between 11.2% and 11.7% for age-based cohorts between 18 and 55 years old. For all age-based cohorts over age 55, Mercer SmartPath default investment options achieved returns between 7.2% and 10.2%.
3. Based on Mercer SmartPath membership data as at 30 June 2024 and for members invested for the entire corresponding time period.
4. Mercer Super Trust’s analysis of Mercer SmartPath, compared to the median of all default funds reported in SuperRatings Fund Crediting Rate Survey – Default Options as at 30 June 2024.
5. Mercer Super Trust’s analysis of the Mercer SmartPath investment performance (after investment fees and taxes) for the period 1 April 2024 to 30 June 2024.
6. Mercer Super Trust’s analysis of the investment performance of the ‘Ready-made’ investment options in the Corporate Super Division (after investment fees and taxes) for the entire 2023/24 financial year.
7. Mercer Super Trust’s analysis of the investment performance of the ‘Ready-made’ investment options in the Corporate Super Division (after investment fees and taxes) for the period 1 April 2024 to 30 June 2024.
8.Mercer Super Trust’s analysis of the ‘Ready-made’ investment options in the Corporate Super Division, compared to its respective growth asset ratio fund survey’s median as reported in SuperRatings Fund Crediting Rate Survey as at 30 June 2024.
9.Mercer Super Trust analysis of financial market asset class returns - Quarterly report to 30 June 2024.
Issued by Mercer Superannuation (Australia) Limited ABN 79 004 717 533, Australian Financial Services Licence #235906, the trustee of the Mercer Super Trust (‘Mercer Super’) ABN 19 905 422 981. The material contained on this website is based on information received in good faith from sources within the market and on our understanding of legislation and government press releases at the date of publication which we believe to be reliable and accurate. Neither Mercer nor any of its related parties accepts any responsibility for any inaccuracy. Prior to acting on any information contained on this website, you need to consider the appropriateness of the advice taking into account your own objectives, financial situation and needs, consider the Product Disclosure Statement for any product you are considering, and seek professional advice from a licensed, or appropriately authorised financial adviser if you are unsure of what action to take. The product Target Market Determination can be found at mercersuper.com.au/tmd. The value of an investment in the Mercer Super Trust may rise and fall from time to time. The investment performance, earnings or return of capital invested are not guaranteed. All performance figures stated above are for investment options available in the Corporate Super Division of the Mercer Super Trust. Past performance is not a reliable indicator of future performance. MERCER’ and ‘Mercer SmartPath®’ are Australian registered trademarks of Mercer (Australia) Pty Ltd ABN 32 005 315 917. Copyright © 2024 Mercer LLC. All rights reserved.