Superannuation just had a fourth straight year of gains. Can it continue?

Superannuation has now delivered four consecutive years of strong returns.

To what extent, you ask? Well, the median growth fund returned 9.5% in FY26.

Add the three years before it, and the total comes to roughly 44%.

That is a very good run by any standard.

So can these returns last for much longer?

What four years of superannuation gains added up to

The numbers are consistent across the board.

Chant West puts the median growth fund, holding 61% to 80% in growth assets, at 9.5% for FY26.

SuperRatings measures a slightly different option and arrives at 9.4%.

The three financial years before that came in at 9.2%, 9.1%, and 10.4%.

Four consecutive years above 9% is unusual.

Australians now hold $4.8 trillion in superannuation, according to APRA's June statistics, up 9.5% over the year.

Contributions reached $236.3 billion across the same period, up 12.8%.

The system is both larger and better funded than it has ever been.

Where the returns came from

Keen investors might want to keep an eye out for this metric.

International shares returned 25.5% in hedged terms during FY26, and they carry roughly a 31% weighting in a typical growth fund.

Australian shares returned just 6.2%.

Australian-listed property was the only negative asset class at -1.8%, while Australian bonds managed 1.5%.

So the run was not broad at all. Instead, it was built on offshore equities, and within those, on a fairly narrow group of companies.

Chant West's Mano Mohankumar was explicit about this trend:

Generally speaking, the better performing funds were those that had higher allocations to international shares, particularly where a larger proportion of that exposure was currency hedged.

What to expect from your superannuation instead

The real benchmark is the funds' own objective.

Most growth options target inflation plus 3.5% a year, which currently works out at roughly 6%.

Chant West notes that funds have met that objective in 73% of rolling ten-year periods since 1992, and its assessment of FY26 was blunt, warning that this level of return "should not be treated as the new normal".

The Australian portion of your balance is the part investors can most easily see for themselves.

By holding funds like the Vanguard Australian Shares Index ETF (ASX: VAS), which tracks the S&P/ASX 300 Index (ASX: XKO), charges 0.07% a year, holds $26.2 billion, and has a distribution yield near 3.1%, investors can potentially replicate these returns themselves.

Foolish takeaway

Four straight years above 9% is an impressive run.

FY27 has started steadily, with growth funds up about 1.3% through the first seven weeks.

I would plan around 6% a year rather than 9%, and treat anything above that as a bonus.

The post Superannuation just had a fourth straight year of gains. Can it continue? appeared first on The Motley Fool Australia.

Motley Fool contributor Mark Verhoeven has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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