Mirror, mirror… what super fund is the best-performing fund of all?

Note: SuperGuide updates this article periodically with the latest performance and super fund data. You can discover the best value superannuation fund of the year for 2014, the super (pre-retirement) fund of the year for 2014, and the pension (retirement) fund of the year for 2014. You can also discover the top 10 performing super funds over 5 years to 30 June 2014. Latest article update was 30 July 2014.

Asking experts and rating agencies for the answer to what super fund is Australia’s best-performing fund can be compared to the vain stepmother in the fairy tale Snow White asking the magical mirror: ‘Mirror mirror on the wall, who in the land is the fairest of all?”. The answer on one day may be: “You, my queen, are fairest of all” while another day it is likely to be: “Queen, you are full fair, ’tis true, but Snow White is fairer than you.”

The dilemma when seeking out ‘the best’ is that the answer also depends on who you’re asking, what you’re asking, and even when you’re asking such a question. Do you want to know the top performer for the past month, three months, 12 months, or the top fund over a period of 3 years, 5 years, 7 years  or 10 years? Are you seeking the best performer before fees, or after fees? Do you want to know the best performer after taxes have been deducted, or after both fees and taxes have been deducted?

Are you comparing like with like? For instance, a super fund investment option that invests only in cash investments will usually have a very different investment return to a super fund investment option that invests 100% of its money in Australian shares or international shares.

Alternatively, when you’re thinking of the best fund, you may be seeking a fund that provides the cheapest fees, or the best value life insurance or the most flexible pension options.

Every month, and each quarter, the daily newspapers report the top-performing super funds for the month or quarter. The data is usually sourced from one of the rating agencies, including:

You then need to differentiate the top-performing funds from what rating agencies consider are the ‘best’ super funds. The ‘best’ super fund tag applied by a rating agency is not necessarily the super fund with the highest performance in a particular year or month, and what is ‘best’ can vary depending on what is used as a measurement.

How did your super fund perform?

In this article we publish some exciting information for those readers interested in hard data on the top all-rounder super funds, and also the winners in the investment performance stakes, courtesy of rating company, SuperRatings. Continue reading to discover the following information:

  • Best value for money super fund of the year for 2014 (across both super accumulation and pension drawdown phases)
  • Top 10 super funds in Australia (based on 400 criteria including investment, fees, insurance, service delivery) for accumulation phase, including the winning super fund
  • Top 10 pension funds in Australia, including the winning pension fund
  • Top 10 super fund performers (balanced investment option) for 1 year to June 2014
  • Top 10 super fund performers (balanced investment option) for 3 years to June 2014 

Note: If you’re seeking investment performance information only, then scroll down to the second half of this article. You can also read about the latest performance figures over 1, 3, 5, 7 and 10 years for the different investment options available, and the latest data on the top-performing super funds in the article Investment performance: We’re the best super fund. No we’re the best…

Tip: If you run a self-managed super fund (SMSF) you can use the investment returns of the large super funds as a benchmark for your own fund’s investment performance. Are you outperforming the large super funds with your asset allocation?

And the award goes to…

On 21 October 2013, ratings agency SuperRatings, announced the Super Fund of the Year for 2014 (across both accumulation phase and pension phase), and the top super fund (accumulation) and the top pension fund for 2014.

SuperRatings reviewed over 300 pre-retirement products and 150 pension products to determine the winner.

The winner of SuperRatings’ Fund of the Year for 2014 is REST, an industry super fund. According to SuperRatings, REST Industry Super is the best value for money fund on an aggregated basis, across both superannuation accumulation and pension drawdown phases. SuperRatings CEO, Nathan McPhee said: “Whilst many funds continue to improve their offerings, REST industry super fund stood out as a fund that had provided its almost 1.9 million members with extremely strong long-term investment returns and competitive fees. This was well supported by additional services including solid administration and governance, complemented by strong education and advice strategies, which are helping to increase knowledge and engagement amongst its membership base of mainly younger Australians.”

The winners for the separate awards of top super fund and top pension fund are detailed below.

Top 10 super funds

SuperRatings evaluated hundreds of super funds based on 400 different criteria (including investments; fees; insurance; service delivery; member education; financial planning facilities; employer support; and fund governance).

In alphabetical order, the top 10 finalists for top super fund (accumulation phase) for 2014 were:

  • AustralianSuper
  • CareSuper
  • Catholic Super
  • First State Super
  • HESTA Super
  • HOSTPLUS
  • QSuper
  • REST Industry Super
  • SunSuper
  • Telstra Super

And the winner is… Telstra Super, a corporate super fund looking after 100,000 members and managing $13.5 billion in assets.

Top 10 retirement/pension funds

In alphabetical order, the top 10 pension funds (out of 150 pension products) for 2014 were:

  • AUSCOAL Super
  • AustralianSuper
  • BUSS (Q)
  • Catholic Super
  • Club Plus
  • HOSTPLUS
  • QSuper
  • REST Allocated Pension
  • Russell Private Active Pension
  • Sunsuper Retirement Pension

And the winner is… REST Allocated Pension, a pension product offered by REST industry super fund – a super fund that looks after 1.9 million members and $27 billion in assets.

Investment performance: Taking a balanced approach

If you’re looking solely at investment performance, then the ‘best’ fund award depends on what type of investment option is involved, and whether you are looking at performance over 12 months, 3 years, 5 years or even 10 years.

More than 80% of Australians have their super money invested in a balanced (sometimes described as ‘growth’) investment option, which generally involves between 60% and 80% of growth-style assets, such as shares and property, and 30% to 40% in more conservative investments, such as cash and fixed interest. Some ‘balanced’ investment options resemble ‘growth’ options, holding 80% or more of assets in growth-style investments.

For example, SuperRatings classifies a ‘balanced’ investment option to be holding 60% to 76% in growth investments while another rating agency, ChantWest, classifies ‘Balanced’ to be an investment option with 41-60% of assets in growth investments. Chant West considers an allocation of 61 to 80% in growth assets to be a ‘growth’ option.

In short, the terms ‘balanced’ and ‘growth’ are sometimes interchangeable, and you should always check the asset mix of any investment option that you’re considering or that you currently use. Your super fund’s default investment option is likely to be a balanced or growth allocation.

The two tables below, sourced from SuperRatings, list the top 10-performing balanced options within super funds for:

  • 1 year period to 30 June 2014
  • 5-year period to 30 June 2014 

Note: Displaying performance figures for different timeframes (for example, 1 year and 5 years to 30 June 2014) highlights the fact that a particular super fund may be the top performer in one period and further down the performance list in another period.

The key when measuring the performance of a super fund is consistent long-term returns over extended periods which means the best long-term performer over longer periods may not necessarily be the top performer in any one or more periods.

Note: The ‘balanced’ option performance tables in this article (tables supplied by SuperRatings) differ from the performance tables in the SuperGuide article ‘Investment performance: We’re the best super fund. No we’re the best…’, (tables supplied by Chant West) due presumably to the differing definitions of ‘balanced’ and ‘growth’

Top 10 balanced options over 1 year to 30 June 2014

According to SuperRatings, the top 10 super funds based on the ‘balanced’ option (investment options with between 60% and 76% in growth-style assets) over the 1-year period ending 30 June 2014 are:

Top 10 Balanced (60-76) – annual returns for 1 year as at 30 June 2014
Fund Investment Option Option Type Return Period Return (% p.a.) Rank
Telstra Super – Balanced Balanced (60-76) 1 year 15.8% 1
Intrust Super – Balanced Balanced (60-76) 1 year 14.0% 2
UniSuper – Balanced Balanced (60-76) 1 year 13.9% 3
AustralianSuper – Balanced Balanced (60-76) 1 year 13.9% 3
Vision Super – Balanced Growth Balanced (60-76) 1 year 13.7% 5
VicSuper FutureSaver – Balanced Option Balanced (60-76) 1 year 13.7% 5
HOSTPLUS – Balanced** Balanced (60-76) 1 year 13.6% 7
Energy Super – Balanced Option Balanced (60-76) 1 year 13.5% 8
Cbus – Growth ** Balanced (60-76) 1 year 13.5% 8
Club Plus Super – MySuper** Balanced (60-76) 1 year 13.4% 10

Table note: All results are net of fees and tax and are for the 1 year ended 30 June 2014. Past performance is not a reliable indicator of future performance.

Source: SuperRatings

Note: If you have actively chosen an investment option, then your super money may not be in a balanced investment option. You will need to do a little more research to uncover the performance data for super funds that have invested in a similar asset allocation to yourself.

Top 10 balanced options over 5-year period to 30 June 2014

According to SuperRatings, the top 10 super funds based on the ‘balanced’ option (investment options with between 60% and 76% in growth-style assets) over the 5-year period ending 30 June 2014 are:

Top 10 Balanced (60-76) – annual returns for 5 years as at 30 June 2014
Fund Investment Option Option Type Return Period Return (% p.a.) Rank
Telstra Super – Balanced Balanced (60-76) 5 year 10.7% 1
REST – Core Strategy Balanced (60-76) 5 year 10.6% 2
GESB Super – Balanced Growth Plan Balanced (60-76) 5 year 10.2% 3
Russell Super Solutions – Russell Balanced Portfolio Balanced (60-76) 5 year 10.1% 4
Commonwealth Bank Group Super – Mix 70 Balanced (60-76) 5 year 10.1% 4
AustralianSuper – Balanced Balanced (60-76) 5 year 10.0% 6
Plum – Pre-mixed Moderate Balanced (60-76) 5 year 10.0% 6
CareSuper – Balanced Balanced (60-76) 5 year 9.9% 8
UniSuper – Balanced Balanced (60-76) 5 year 9.9% 8
HESTA – Core Pool Balanced (60-76) 5 year 9.8% 10

Table note: All results are net of fees and tax and are for the 5 years ended 30 June 2014. Past performance is not a reliable indicator of future performance.

Source: SuperRatings 



IMPORTANT: SuperGuide does not provide financial advice. SuperGuide does not answer all questions posted in the comments section. SuperGuide may use your question or comment, or use questions from several readers, as the basis for an article topic that we publish on the SuperGuide website. We will not disclose names or personal information in these articles. Comments provided by readers that may include information relating to tax, superannuation or other rules cannot be relied upon as advice. SuperGuide does not verify the information provided within comments from readers. Readers need to seek independent advice about their personal circumstances.

Comments

  1. ruth fehring says:

    My supers are everywhere. have rolled over one and trying to redirect two others. lm ten years from retirement. working at the moment.A accumulating funds for now. lve read and written notes.

    gee, so much to take in, in relation to fees,IFA,TPD or ddd and so on.
    l work hours, fund needs growth, low fees . lve been wanting to make extra payments to a supper fund.

    please help to advise and whom to trust with a person super.
    how do l see to make this simple, lm not a super fund adviser but need direction.
    l have enjoyed the pervious comments of others seeking direction.

    kindest regards ruth

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