Vanguard Super announces double-digit returns

Vanguard Super has reported a return of 13.2 per cent from its MySuper Lifecycle investment option for the 2023–24 financial year.

This is the default option for members under the age of 47.

Meanwhile, the fund’s Balanced and Growth options have returned 8.11 per cent and 10.6 per cent, respectively, while its High Growth and Ethically Conscious Growth investment options delivered 13.18 per cent and 12.23 per cent, respectively. 

The results marked Vanguard Super’s first full financial year since its launch in November 2022, said Duncan Burns, Vanguard Asia-Pacific CIO.

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It now holds nearly $1.5 billion in funds under management.

“At Vanguard, our focus is on delivering long-term, steady investment value to our members. While it is still early days, we have certainly started strong,” Burns said.

He said that all of Vanguard Super’s investment options are indexed solutions, which offer members “distinct advantages” such as diversification of assets to help reduce market risk and weather volatility, a focus on long-term performance, and lower fees and costs.

“Nearly 50 years ago, the Vanguard Group pioneered index investing as a low-cost and effective strategy to help get people closer to their financial goals,” Burns said.

“By using indexed solutions for all Vanguard Super products, we’ve been able to keep our costs low while still delivering value and strong performance for our members so they can retire with confidence.”

Earlier this year, the fund announced across-the-board fee cuts that came into effect on 1 May 2024. Administration fees across all products were reduced to 0.33 per cent, down from 0.35 per cent.

Additionally, the administration fee cap was lowered from $850,000 to $300,000.

Burns said: “Investment performance absolutely matters, but so do fees and costs, and neither should be viewed in isolation.

“Coupled together, investment performance, and fees and costs are the factors that will materially impact your superannuation balance at retirement.”

According to the fund, as a result of the fee reductions, its default MySuper Lifecycle product is one of the lowest-cost MySuper products in the industry.

“We’re doing our bit at Vanguard Super to ensure our members not only benefit from our low fees, but also have clear information about their fees,” Burns said.

A number of retail funds have announced double-digit returns in recent weeks, such as Colonial First State, which saw its FirstChoice Employer Super balanced fund (MySuper Lifestage 1965–69) deliver a 12.1 per cent return for FY23–24, while the FirstChoice Employer Super growth fund (MySuper Lifestage 1975–79) delivered a 14.3 per cent return.

Similarly, AMP announced a return of 11.14 per cent for members of its AMP MySuper 1970s superannuation fund option, its largest by funds under management.