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.

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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.

I think broker recommendations can be interesting when a share price has fallen but the underlying business is still moving in the right direction.

Morgans currently sees that opportunity in two ASX shares.

Both have been given buy ratings, with the broker arguing that recent weakness has created a better entry point.

Jumbo Interactive Ltd (ASX: JIN)

Jumbo Interactive shares are trading around $6.69 on Tuesday.

The lottery technology company recently reported underlying EBITDA of $85.2 million, up 25%, while underlying NPATA increased 20% to $50.6 million. That came despite another unusually weak year for large Australian lottery jackpots.

Morgans believes the result was stronger than the share price reaction suggested.

The broker noted that Jumbo’s international operations are becoming much more meaningful, with Managed Services and Prize Draws contributing $30.3 million compared with just $7 million a year earlier.

That growth helped offset a 10% decline in Australia as large jackpot activity remained soft.

There are still some uncertainties. Morgans pointed to questions around Brightstar and FY27 guidance that came in below parts of the market’s expectations.

Even so, the broker described that guidance as conservative and continues to expect Jumbo’s financial position to strengthen, forecasting a return to net cash by FY29.

Morgans has retained its buy recommendation and reduced its price target slightly from $10.25 to $9.81.

From the current share price, that implies potential upside of roughly 47%.

Sigma Healthcare Ltd (ASX: SIG)

Sigma Healthcare is another ASX share Morgans thinks has been treated too harshly by investors.

The shares are currently trading around $2.69 after falling following the company’s FY26 result.

Sigma delivered EBIT growth of more than 20%, while like-for-like Chemist Warehouse sales increased 13.4% in Australia and 12.2% internationally.

Australian growth slowed somewhat during the second half, but Morgans attributed this partly to a later start to the cold and flu season and a particularly strong comparison period.

Importantly, Sigma is targeting double-digit revenue and earnings growth in FY27.

The broker did trim its forecasts by around 3.5%, but it still believes the market reaction has gone too far.

Morgans said the post-result decline, which was also influenced by the possibility of some founders selling shares, had created an opportunity. As a result, the broker upgraded Sigma from accumulate to buy.

Its price target now sits at $3.19, down slightly from $3.30 previously.

That represents potential upside of around 19% from the current share price.

Foolish takeaway

Morgans sees upside in both ASX shares, although the investment cases are quite different.

Jumbo’s opportunity rests on international growth becoming a larger part of the business while Australian jackpot conditions eventually normalise.

Sigma, meanwhile, is still delivering strong growth following the Chemist Warehouse combination, and Morgans believes the recent sell-off has been overdone.

Based on the broker’s latest price targets, both ASX shares could have meaningful upside from here.

The post 2 ASX shares tipped to return 19% to 47% appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Jumbo Interactive. The Motley Fool Australia has recommended Jumbo Interactive. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

ASX tech shares have been through a brutal repricing, and there is strong disagreement about what comes next.

The S&P/ASX All Technology Index (ASX: XTX) is down more than 27% over twelve months.

Two names capture the argument better than the index does.

One has halved while brokers argue over what it is worth.

The other has risen while brokers and the market draw opposite conclusions from the same result.

Why ASX tech shares have been repriced

Three things happened at roughly the same time.

The Reserve Bank raised the cash rate three times this year to 4.35%, which is hard on companies valued on distant earnings.

Several high-multiple names missed expectations during reporting season.

Investors also began seriously debating whether artificial intelligence erodes software business models rather than enhancing them, a fear now nicknamed the “SaaSpocalypse”.

To illustrate the complex nature of the ASX tech market, WiseTech Global Ltd (ASX: WTC) grew FY26 revenue by 79% and underlying profit by 29%, and the shares still fell 10% on the day.

Good numbers are not being rewarded at the moment.

Xero: where the brokers disagree with each other

Xero Ltd (ASX: XRO) is down about 52% over twelve months and a long way below its $166.00 high.

The FY26 result was not the problem.

Operating revenue rose 31% to NZ$2.75 billion and annualised monthly recurring revenue climbed 37% to NZ$3.27 billion.

Free cash flow reached NZ$554 million at a 20.1% margin, and subscribers grew 11% to 4.92 million.

The complications sit underneath the headline.

Net profit fell 27% to NZ$167.4 million on Melio integration costs, and gross margin slipped from 89% to 83.9% as payments changed the revenue mix.

Roughly 5% of the register is now sold short, a record for the company.

Chief executive Sukhinder Singh Cassidy pointed to the United States as a catalyst for future growth:

Our strong full year results demonstrate Xero’s disciplined execution and macro-resilience. Our 3×3 strategy is hitting its stride, demonstrated by accelerating US growth with 110,000 new customers, including new Melio direct payments customers.

Megaport: where the brokers disagree with the market

Megaport Ltd (ASX: MP1) is a mirror image of the previous two companies.

The company’s shares sit near $16.73 and are up about 23% over twelve months.

FY26 revenue rose 37% to $312.2 million, while group annual recurring revenue jumped 62% to $395.2 million.

EBITDA reached $77.1 million on a 25% margin.

Then the market read the rest of it.

The company swung to a $39.0 million net loss, and FY27 guidance calls for capital expenditure of $1.28 billion to $1.38 billion after raising close to $1 billion.

As a result, shares fell about 20% across five sessions.

Chief executive Michael Reid saw things differently:

FY26 produced an exceptional result. Group Annual Recurring Revenue increased by 62% to $395.2 million, revenue grew by 37% to $312.2 million, and EBITDA reached $77.1 million. These are incredible results and we’re only just getting started.

Analysts have sided with him.

Megaport carries nine buy ratings with no holds or sells and an average target near $24.99.

FY27 revenue guidance of $620 million to $730 million implies growth of at least 100%.

Foolish takeaway for these ASX tech shares

All of these ASX tech shares ask you to look deep into the future to understand why these companies may be attractive investments.

Xero asks whether a business growing revenue at 31% deserves a price-to-earnings ratio near 99 while its margins compress.

For its part, investors in Megaport will be asking whether $1.3 billion of capital expenditure produces the returns management expects.

The post Xero and Megaport: 2 ASX tech shares the market can’t agree on appeared first on The Motley Fool Australia.

More reading

• UBS names its 10 top ASX picks for the next 3-6 months
• WiseTech shares are down 62%. Why are brokers still bullish?
• Down 62%, are WiseTech shares now a buy, hold or sell?
• These ASX shares benefit from a high Aussie dollar
• Buy, hold, sell: Megaport, Xero, AMP shares

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 positions in and has recommended Megaport, WiseTech Global, and Xero. The Motley Fool Australia has positions in and has recommended WiseTech Global and Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.