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

Note: SuperGuide updates this article every 6 months with the latest performance and super fund data. Discover the best ‘value for money’ super fund for 2016, the super (pre-retirement) fund of the year for 2016, and the pension (retirement) fund of the year for 2016. This article lists the top 10 performing balanced/growth super funds over 12 months to 31 December 2015, and over 5 years to 31 December 2015. This article also lists the top 10 pension balanced/growth funds over 5 years to December 2015. Latest article update was 2 May 2016.

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, 10 years, or even 15 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:

  • SuperRatings
  • Chant West
  • SelectingSuper
  • MorningStar
  • Canstar

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

  • Best ‘value for money’ fund. Best value for money super fund of the year for 2015 (across both super accumulation and pension drawdown phases)
  • Top 10 ‘best value’ MySuper funds. Top 10 ‘best value’ MySuper funds in Australia, including the winning MySuper fund
  • Top 10 ‘best value’ choice super funds. Top 10 ‘best value’ super funds in Australia, where you choose to join (based on hundreds of criteria including investment, fees, insurance, service delivery) for accumulation phase, including the winning super fund
  • Top 10 ‘best value’ pension funds. Top 10 ‘best value’ pension funds in Australia, including the winning pension fund

BEST-PERFORMING SUPER FUNDS AND PENSION FUNDS

  • Top 10 performing super funds (balanced investment option) for 1 year to 31 December 2015
  • Top 10 performing super fund performers (balanced investment option) for 5 years to 31 December 2015
  • Top 10 performing pension funds (capital stable option) for 5 years to 31 December 2015 

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, 10 and 15 years for the different investment options available, and the latest data on the top-performing super funds in the SuperGuide articles:

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 29 October 2015, ratings agency SuperRatings, announced the Super Fund of the Year for 2016 (across both accumulation phase and pension phase), and the top super fund (pre-retirement, that is, accumulation) and the top pension (retirement) fund for 2016.

SuperRatings reviewed more than 620 superannuation products (including 110 MySuper products) to determine the winner.

The winner of SuperRatings’ Fund of the Year for 2016 is QSuper, a public sector fund, also described as a not-for-profit super fund, with 550,000-plus members and more than $59 billion in assets.

According to SuperRatings, in naming QSuper as the best fund for 2016, the rating company looked for “the strongest and best value end-to-end retirement solution, including both accumulation and pension phases.”

QSuper has “a history of providing outstanding investment returns, coupled with competitive fees and outstanding services to its members, which has led to very strong member engagement.

Areas reviewed included in-depth analysis of funds’ investments, fees, insurance, administration, advice and governance.

SuperRatings CEO, Adam Gee said: “In this constantly changing superannuation environment, QSuper is a standout, performing consistently well across all of SuperRatings’ key assessment criteria.

The ‘best value’ super fund for 2017 will be announced in late-October 2016.

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

Top 10 ‘best value’ MySuper funds

SuperRatings evaluated 110 MySuper funds based on criteria (including investments; fees; and insurance). According to SuperRatings, “MySuper offerings are default products generally designed for members who do not actively choose a fund or an investment option”.

In alphabetical order, the top 10 finalists for top MySuper fund for 2016 are:

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

And the winner is… QSuper, a public sector super fund looking after more than 550,000 members and managing $59.2 billion in assets.

Top 10 ‘best value’ choice super funds

According to SuperRatings, the Choice Super of the Year Award recognises the best value product for members who are actively engaged with their super and want a higher level of control of investment choices.

SuperRatings evaluated hundreds of super funds based on hundreds of 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 2016 are:

  • CareSuper
  • Equip
  • HOSTPLUS
  • Mine Wealth + Wellbeing
  • Plum Superannuation Fund
  • QSuper
  • SunSuper
  • Telstra Super
  • UniSuper
  • VicSuper

And the winner is… CareSuper, an industry super fund looking after more than 250,000 members and managing $10.4 billion in assets.

Top 10 ‘best value’ retirement/pension funds

In alphabetical order, the top 10 pension funds for 2016 are:

  • AustralianSuper
  • Catholic Super Pension
  • Club Plus Super
  • Mine Wealth + Wellbeing
  • OnePath OneAnswer Frontier
  • QSuper
  • REST Industry Super
  • Sunsuper
  • Telstra Super
  • VicSuper

And the winner is… AustralianSuper, an industry super fund that looks after $91.8 billion of funds under management.

Investment performance: What super fund is the best performing?

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, 10 years, or even 15 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 (both international and Australian) 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.

Note: If you have actively chosen an investment option, then your super pension 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.

The three tables below, containing data sourced from SuperRatings, list the top 10-performing balanced options within super (accumulation) funds for 12-month period to 31 December 2015, and 5-year period to 31 December 2015, and top 10-performing capital stable options for retirement (pension) funds for 5-year period to 31 December 2015.

Note: Displaying performance figures for different timeframes (for example, 1 year and 5 years to 31 December 2015) 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 best performer in any one or more periods.

Best-performing super funds

Super funds — Top 10 performers for 1 year to 31 December 2015

According to SuperRatings, the best-performing super funds based on the ‘balanced’ option (investment options with between 60% and 76% in growth-style assets) over the 1-year period ending 31 December 2015 are:

Table 1. Super Funds: Top 10 Balanced (60-76) options for 1 year as at 31 December 2015
Fund Investment OptionOption TypeReturn PeriodReturn (% p.a.)Rank
MTAA — My AutoSuperBalanced (60-76)1 year9.52%1
BUSSQ – Balanced GrowthBalanced (60-76)1 year8.56%2
UniSuper — BalancedBalanced (60-76)1 year7.66%3
AustralianSuper — BalancedBalanced (60-76)1 year7.65%4
Cbus MySuper — GrowthBalanced (60-76)1 year7.54%5
Sunsuper — BalancedBalanced (60-76)1 year7.30%6
CareSuper — BalancedBalanced (60-76)1 year7.09%7
AustSafe Super – MySuper BalancedBalanced (60-76)1 year7.02%8
HOSTPLUS – BalancedBalanced (60-76)1 year7.00%9
Intrust Super  —  Balanced Balanced (60-76)1 year6.99%10

Table note: All results are net of fees and tax and are for the 1 year ended 31 December 2015. 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.

Super funds — Top 10 performers for 5 years to 31 December 2015

According to SuperRatings, the best-performing super funds based on the ‘balanced’ option (investment options with between 60% and 76% in growth-style assets) over the 5-year period ending 31 December 2015 are:

Table 2. Super Funds: Top 10 Balanced (60-76) options for 5 years as at 31 December 2015
Fund Investment OptionOption TypeReturn PeriodReturn (% p.a.)Rank
UniSuper Accum (1)  — BalancedBalanced (60-76)5 year9.2%1
Cbus – Growth (Cbus MySuper)Balanced (60-76)5 year9.2%1
HOSTPLUS — BalancedBalanced (60-76)5 year9.1%3
CareSuper — BalancedBalanced (60-76)5 year9.1%3
BUSSQ Premium Choice – Balanced GrowthBalanced (60-76)5 year9.0%5
AustralianSuper — BalancedBalanced (60-76)5 year9.0%5
Telstra Super Corp Plus — BalancedBalanced (60-76)5 year9.0%5
REST — Core StrategyBalanced (60-76)5 year8.8%8
Equip Corp  — Balanced GrowthBalanced (60-76)5 year8.8%8
AustSafe Super — MySuper BalancedBalanced (60-76)5 year8.6%10

Table note: All results are net of fees and tax and are for the 5 years ended 31 December 2015. Past performance is not a reliable indicator of future performance.

Source: SuperRatings 

Best-performing pension funds 

Pension funds — Top 10 performers for 5 years to 31 December 2015

According to SuperRatings, the best-performing allocated pension funds based on the ‘capital stable’ option (investment options with between 20% and 40% in growth-style assets) over the 5-year period ending 31 December 2015 are:

Table 3. Pension Funds: Top 10 Capital Stable (20-40) options for 5 years as at 31 December 2015
Fund Investment OptionOption TypeReturn PeriodReturn (% p.a.)Rank
UniSuper AP — Capital StableCapital Stable (20-40)5 years8.3%1
Aon Master Trust Allocated Pension – Moderate- ActiveCapital Stable (20-40)5 years8.1%2
Telstra Super RetireAccess Allocated Pension — ConservativeCapital Stable (20-40))5 years7.9%3
VicSuper Allocated Pension — Capital Stable OptionCapital Stable (20-40)5 years7.9%3
AustralianSuper Choice Income Account — StableCapital Stable (20-40)5 years7.7%5
CareSuper — Capital StableCapital Stable (20-40)5 years7.7%5
RBF Allocated Pension — RBF ConservativeCapital Stable (20-40)5 years7.7%5
HOSTPLUS Allocated Pension — Capital StableCapital Stable (20-40)5 years7.5%8
REST Allocated Pension  — Capital StableCapital Stable (20-40)5 years7.4%9
Energy Super — Allocated Pension – Stable OptionCapital Stable (20-40)5 years7.4%9

Table note: All results are net of fees and tax and are for the 5 years ended 31 December 2015. Past performance is not a reliable indicator of future performance.

Source: SuperRatings

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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