A surge in global share prices combined with a sharp fall in the value of the Australian dollar helped superannuation funds record their second-best performance last year since the introduction of compulsory contributions in 1992.

The average balanced scheme posted a 17.5 per cent gain, with the top-performing fund – the REST Core vehicle – returning nearly 20 per cent, a survey from research firm Chant West showed.

Behind the stellar performance was a 19.7 per cent gain in Australian shares and a 48 per cent gain in unhedged international shares. The sharp rise recorded by international shares was in part thanks to a fall in the Australian dollar to US89¢ from $US1.04.

“While growth funds are well diversified across different sectors, listed shares and property are still the biggest components of their investment mix. Share markets in general performed well in 2013, but international shares outperformed Australian shares. Currency movements were also a major factor. As a result, the funds that did best were those that had significant investments in international shares and chose to have a lower portion of their foreign currency exposure hedged,” said Chant West director Warren Chant.

Half of the top 10 performers last year were industry super funds. Telstra Super was the top-performing corporate fund, recording a 19.3 per cent return, while retail providers Aon, MLC, JANA and AMP also had products in the top 10. Super's best annual performance came in 1993, one year after compulsory contributions were introduced.

Mr Chant warned fund members against placing too much emphasis on one-year gains, on the grounds super is a long term investment. Most young individuals will have super for 40 to 50 years.

“There will be good times and bad times, and you certainly can’t expect returns like this every year,” he said. Nevertheless, the average balanced fund has added 7.2 per cent annually over the past decade, in line with fund managers’ long term objective.

Last year industry funds outperformed their retail fund counterparts, posting a 17.4 per cent return, against 16.9 per cent rise by the latter.