Superannuation market dynamics

At the same time, regulatory scrutiny is intensifying, with a greater focus on investment governance, transparency, and delivering measurable outcomes across the member lifecycle, alongside continued shifts in asset allocation and the role of private markets within portfolios.

Market overview

Total superannuation funds under management reached $4.4 trillion as at March 2026. The total assets in superannuation have grown by an impressive 118% over 10 years to March 2026, highlighting the strong long-term expansion of the system.

Over the past 10 years, the market structure has shifted quite materially. The not-for-profit sector has been the clear winner, increasing its share from around 30% to 55% over the past decade. In contrast, SMSFs have declined from 42% to 24%, while retail funds have reduced from 29% to around 20%.

Overall, what this tells us is that scale, efficiency, and consolidation continue to reshape the competitive dynamics of the industry.

Product landscape and member trends

Product segmentation within APRA-regulated superannuation funds shows that MySuper remains a core pillar of the system, with approximately $1.2 trillion out of total $3 trillion in APRA-regulated assets. Alongside this, choice products account for around $1.5 trillion, split between $927 billion in accumulation products and about $600 billion in retirement products, while defined benefit funds represent roughly $150 billion.

What is particularly notable here is the growth in retirement products. Over the five years to December 2025, retirement funds under management (FUM) recorded the strongest growth at 45%, reflecting the ageing member base. This trend is also evident in account growth, where retirement accounts increased by 19%, compared to 10% growth in MySuper accounts, while choice and defined benefit accounts have declined.

This shift toward retirement products is expected to accelerate further as demographics continue to evolve and more members transition into retirement.

Currently, nine funds each manage over $100 billion, and together they account for approximately 57% of total superannuation assets. Funds in the $50-$100 billion range hold a further 21%, while mid-sized funds between $30-$50 billion account for another 12%. In total, just 27 funds control around 90% of all superannuation assets, reinforcing how concentrated the industry has become.

While consolidation activity may begin to stabilise, the structural trend toward scale and concentration is expected to remain firmly in place.

Asset allocation trends

Within APRA-regulated superannuation funds, equities continue to dominate for the obvious reasons.

International equities account or approximately 32% of total assets, and when combined with Australian equities, overall equity exposure increases to 56%. This concentration is consistent with earlier observations that equities remain the primary driver of returns; however, higher allocations to listed equities also elevate overall market risk exposure and the downside risk.

This increased allocation has largely come at the expense of defensive assets. Cash allocations have halved, from around 12% to 6%, while property and fixed income have seen modest reductions.

Other asset classes, including alternatives, have grown slightly, reflecting ongoing diversification-particularly into private markets.

Private assets & internalisation: Asset mix

Private debt has been a key area of interest, experiencing strong growth in recent years, albeit from a smaller base.

As of end December 2025, there was a total of $34 billion invested in private debt. At the same time, unlisted infrastructure continues to lead allocations, rising steadily from $120 billion in June 2022 to $200 billion by December 2025, reflecting strong demand for stable, inflation-linked income streams. Allocations to private equity and unlisted property remain relatively stable suggesting ongoing repricing and valuation adjustments.

This links closely to another major structural trend-internal investment management. As funds continue to scale, particularly within the industry superannuation sector, there is increasing focus on bringing investment capabilities inhouse to gain greater control, flexibility, and cost efficiency.

UniSuper has been known for having the highest percentage of internally managed assets, but we see this trend ticking up in other funds as well. Australian Super, the largest superannuation fund, now manages 55% of its over $400 billion assets in house.

On average, around 35% of industry fund assets are now internally managed, and this proportion is expected to grow further in the coming years.

Total Portfolio Approach (TPA)

Traditionally, funds have operated within asset class silos, but as scale and complexity have increased, this approach is becoming less effective. A total portfolio approach or TPA shifts the focus to the total portfolio outcome, with decisions based on overall return, risk, and member objectives.

This includes dynamic asset allocation and more advanced risk budgeting, allowing funds to allocate risk- not just capital-more efficiently across the portfolio.

Liquidity management is also becoming central in view of member demographics shift. With more members entering retirement, funds are seeing higher drawdowns and more consistent cash outflows, while allocations to illiquid private assets continue to rise. Managing this balance at the total portfolio level is now critical.

TPA also improves coordination across public and private markets, ensuring exposures are aligned and not duplicated.

However, from a regulatory perspective, disclosure frameworks still focus on strategic asset allocation, creating a disconnect between how portfolios are managed and how they are reported. And to be clear it is not that fund switch from one approach to the other, but it is more of gradual mindset shift to look at a portfolio holistically.

Overall TPA is gaining momentum, particularly among large industry funds, and is likely to become a defining feature of investment management in superannuation going forward.

Regulatory landscape

Currently there are various initiatives at play across APRA, ASIC and Treasury which are grouped into overarching key themes.

We have seen a clear shift over time toward measurable member outcomes, and that is supported by better data, greater transparency, and benchmarking particularly through APRA's work, and Treasury's proposed changes to the superannuation performance test, and the upcoming retirement reporting framework.

The introduction of Payday Super has also raised the bar for transactional transparency across the system and trustee operational competency. Meanwhile, Division 296 has shifted the focus toward member-level tax outcomes and balance management.

Historically, the focus has been heavily concentrated on MySuper. While that was appropriate, the expansion of the choice segment and growth among platforms has driven a corresponding shift in attention.

This was already underway, but the collapse of the First Guardian Master Fund (First Guardian) and the Shield Master Fund (Shield) accelerated it sharply and brought government attention and now funding with it.

Alongside that, the expectation of what a well-run superannuation fund looks like has changed. Regulators are not just asking what outcomes are being delivered, they are asking how, through what governance structures, and what risks sit throughout the entire value chain.

Enforcement has also sharpened, better data means better insights and comparability, and regulators are using it. The volume of enforcement action being taken has increased materially in recent years.

The risk landscape is also shifting quickly. "AI and cyber are the ones keeping me up at night," Rainmaker associate director of research, Dr Camille Schmidt said. "On AI: most of us are using it, but the oversight frameworks are not keeping pace," Dr Schmidt claimed.

APRA flagged this in a letter to industry in April, and it has been called out in their system risk report released in May. ASIC also released a letter in May urging industry to strengthen cyber resilience as AI threats intensify.

But the piece getting less attention is the cultural shift, that is, how AI is changing the quality and nature of information leaders are making decisions on, and the accountability questions that raises around disclosure and model bias.

With regulators increasingly focused on where risks sit across the value chain, the next question is: Where is money flowing? Because that is ultimately where exposure is building and where the attention of regulators is likely to intensify.

Looking at the growth in Choice funds under management that has occurred, platforms now account for 28% of Choice member assets and that figure has remained relatively stable over the last few years-from 27.3% in 2023. However, we are seeing a shift in terms of which providers account for that piece of the pie.

The top 10 master trusts based on accumulation product market share alongside their 3-year growth in funds under advice (FUA) to December 2025.

We are seeing the highest organic growth among modern, independent platforms with HUB24 achieving 3-year growth in assets of 36% and Netwealth not far behind at 24%. Market leaders like CFS and BT have retained their positions but are growing more modestly.