Level: Basic

Measuring the investment returns that help to grow your super

Understand how we measure investment returns and how they can grow your super.

Your super balance will change based on:

What goes in (contributions + investment returns) minus what comes out (taxes + fees + insurance premiums + withdrawals)

This guide will focus on the ‘investment returns’ part of the equation.

Investment returns will be different for each of our 15 investment options. The investment return for each option depends primarily on the amount those investments have earned over time and the investment fees, transaction costs and taxes paid..

The unit price for each investment option will reflect the investment return for that option. We calculate a member’s balance ($) using the number of units they hold in each investment option and the value of each of those units.

We have several ways we can measure investment returns:

Annual investment return

Annual investment return measures the change in the value of an investment over one year. Investment returns can be negative or positive. Annual returns are usually displayed as a percentage ( % ), they can also be displayed in dollar terms ( $ ).



As a general rule, the more money you have in your super, the more market moves (positive or negative) will impact your balance in dollar terms.

When you are just starting out, it’s likely your balance will be small and your returns will be small in dollar terms. It’s also quite likely your contributions will outweigh your investment returns in any given year.

Once you have a larger balance, your returns will be larger in dollar terms, and your investment returns may outweigh your contributions in any given year. For example:

Starting amount Annual return (%) Annual return ($)
$5,000 -4% -$200
$5,000 4% $200
$450,000 -4% -$18,000
$450,000 4% $18,000

Average annual rate of return

Average annual rate of return is often measured over 3-year, 5-year, and 10-year periods.

Average annual return is usually displayed as a percentage per annum, or % p.a. and measures how much an investment increased each year on average, over a specific time frame.

For example, if an option returned 3%, 12% and 1% over the past 3 years, the average annual rate of return over 3 years was 5.23% p.a1.


What does 'Per annum' mean?

'Per annum' (p.a.) is borrowed from Latin, it means ‘for a year’.

Investment returns are generally more variable over shorter time frames. Looking at the returns for any given year, you may notice very low or very high returns (in the example above, +12%). 

By taking the average annual rate of return over several years we get a better picture of the pattern of returns over time. While having a great return for one year is nice, super is generally a long-term investment, so it is important to get good returns over longer periods of time.

Each of Rest’s structured investment options has an investment objective - they aim to achieve a certain average return over a rolling period of time. For example, Core Strategy aims to achieve an average annual return of CPI (inflation) +3% p.a over a rolling 10-year period. If the Core Strategy achieves its objective, if you invest over any 10-year period you would receive a return of at least CPI + 3% p.a.


What does CPI mean?

CPI stands for the Consumer Price Index. CPI is a measure of inflation that compares the cost of living (i.e. goods and services) over time. CPI is calculated and reported by the Australian Bureau of Statistics. 

We can compare the average annual rate of return of an option to its investment objective to judge if it has met its investment objective. An option could very well have a negative return in one year and still achieve its investment objective over 10 years. Alternatively, an option could have a positive return in one year and still fail its investment objective over 10 years.

Cumulative return

Cumulative return measures the total percentage return over any set period of time. If we know the dollar value change, we can calculate this as:

Change in value / initial value = cumulative return

For example, if an investment of $10,000 increases to $11,650 the cumulative return would be 16.5% (assuming no contributions or withdrawals)

$1,650/$10,000 = 16.5%.

An example: the same returns measured three different ways

Time period Return
3 standalone years  
Year 1 return 3.0%
Year 2 return 12.0%
Year 3 return 1.0%
Annualised over 3 years  
3-year annualised return 5.2% per annum
Cumulative over 3 years  
3-year cumulative return 16.5%

You might notice the cumulative return is more than the sum of the parts (16.5% is more than 3%+12%+1%), it’s because the returns are compounding! 

Each successive year there is a return on the original amount plus a return on the previous returns where they are reinvested. The impact of compounding is typically minimal early on, but its impact continues to grow over time as investment returns are reinvested.

You can seek to harness the power of compounding by investing over the long term. Many of Rest's investment options have a long term investment objective and benefit from the power of compounding to grow your savings for retirement.

The rule of 72

To estimate the effect of investment returns, we can use the ‘rule of 72’. A quick way to estimate how long it might take to double your money. If you take 72 and divide by the annual return, you’ll get the approximate number of years it would take for your initial amount to double (assuming no contributions or withdrawals).

For example, 72 / 6 = 12 years.

You can approximate, given any amount of money if you can achieve a return of 6% every year for 12 years you will double the original amount.

For a more accurate estimate of how your super might grow over time you can use Rest’s superannuation calculator.

Keep track of investment returns

You can see your balance history by logging into MemberAccess or the Rest app. Your balance history will reflect all of your transactions, not just your investment returns.

Your annual statement will provide a summary of your investment returns for the financial year.

Anyone can keep track of the investment returns for each investment option here.



It is important to remember that the investment return is only one of the factors that will affect your super balance over time.

1.Average annual rate of return formula = ((1 + R1) * (1 + R2) * (1 + R3)) ^ (1/N) – 1
= ((1+0.03)*(1+0.12)*(1+0.01))^(1/3) – 1
= 5.23%
Where R1 = 3% (annual return year 1), R2 = 12% (annual return year 2), R3 = 1% (annual return year 3) N = total number of years = 3

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