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 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:
- Chant West
- SuperRatings
- SelectingSuper
- MorningStar.
You then need to differentiate the top-performing funds from what rating agencies consider to be 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.
And the award goes to…
According to ratings agency SuperRatings, in alphabetical order, the top 10 super funds for 2009, based on 400 different criteria (including investments; fees; insurance; service delivery; member education; financial planning facilities; employer support; and fund governance), are:
- AustralianSuper
- Catholic Super
- First State Super
- HESTA
- HOSTPLUS
- NGS Super
- QSuper
- REST
- Sunsuper
- Telstra Super
According to SuperRatings, the top five pension funds (in alphabetical order) are:
- BUSS(Q) Retirement Pension
- Catholic Super Allocated Pension
- First State Super Retirement Income Stream
- QSuper Pension Account
- Sunsuper Pension Option
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.
You may be surprised to discover that investment options for super accounts drawing pensions delivered lower returns than similar investment options for super accounts in accumulation phase.
Taking a balanced approach
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 70% 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.
ChantWest classifies ‘Balanced’ to be an investment option with 41-60% of assets in growth investments while another rating agency, SuperRatings classifies a ‘balanced’ investment option to be holding 60% to 76% in growth investments.
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.
Chant West says…
Top-performing superannuation funds: According to rating agency, Chant West, the top 10 balanced/growth investment options over the past 12 months, and over the past 5 years, to 30 June 2009 are listed in the table below. Note that all of the top performing funds for the 12-month period recorded losses for the year.
| Superannuation funds: Top 10 balanced/growth investment options | |||
| Investment Option (Growth 61-80%) | 12 months to 30 June 2009 (loss) | Investment Option (Growth 61-80%) | 5 years* to 30 June 2009 |
| 1 REST Core | (7.8 %) | 1 Catholic Super Balanced | +6.0% |
| 2 EquipSuper Balanced Growth | (8.3%) | 2 BUSS (Q) Balanced Growth | +5.7% |
| 3 FSS (NSW) Diversified | (8.3%) | 3 Catholic Super Mod. Aggressive | +5.6% |
| 4 REST Diversified | (8.4%) | 4 CareSuper Balanced | +5.6% |
| 5 Cbus Moderate Growth | (8.7%) | 5 REST Diversified | +5.5% |
| 6 CareSuper Balanced | (8.9%) | 6 REST Core | +5.5% |
| 7 UniSuper Balanced Diversified | (9.1%) | 7 Cbus Core Strategy | +5.4% |
| 8 Tasplan Balanced | (9.5%) | 8 ESSSuper Growth | +5.4% |
| 9 Asgard SMA Balanced | (9.8%) | 9 UniSuper Balanced | +5.3% |
| 10 Catholic Super Balanced | (9.9%) | 10 AustralianSuper Balanced | +5.2% |
| Upper quartile | (10.9%) | Upper quartile | +4.9% |
| Median | (12.9%) | Median | +4.3% |
| Lower quartile | (14.7%) | Lower quartile | +3.0% |
*Four other super funds had 5-year returns equal to or above 5% per annum (HOSTPLUS balanced 5.2%, NGS Super Diversified 5.1%, EquipSuper Balanced Growth 5%, Health Super MT Growth 5%).
Source: Data extracted from Chant West website (www.chantwest.com.au)
Top-performing pension funds: According to Chant West, the top 10 balanced/growth investment options in pension funds over the past 12 months, and over the past 5 years, to 30 June 2009 are listed in the table below. Note that all of the top performing funds for the 12-month period recorded losses for the year.
| Pension funds: Top 10 balanced/growth investment options | |||
| Investment Option (Growth 61-80%) | 12 months to 30 June 2009 (loss) | Investment Option (Growth 61-80%) | 5 years to 30 June 2009 |
| 1 REST Diversified | (8.8 %) | 1 Catholic Super Balanced | +6.6% |
| 2 REST Core | (9.0%) | 2 REST Diversified | +6.2% |
| 3 FSS (NSW) Diversified | (9.2%) | 3 Health Super MT Growth | +5.9% |
| 4 EquipSuper Balanced Growth | (9.5%) | 4 QSuper Balanced | +5.7% |
| 5 Tasplan Balanced | (10.4%) | 5 UniSuper Balanced | +5.5% |
| 6 UniSuper Balanced | (10.5%) | 6 NGS Super Diversified | +5.4% |
| 7 Health Super MT Growth | (10.8%) | 7 Sunsuper Balanced | +5.2% |
| 8 Asgard SMA Balanced | (10.9%) | 8 AGEST Balanced | +4.7% |
| 9 Catholic Super Balanced | (11.4%) | 9 Auscoal Growth | +4.5% |
| 10 NGS Super Diversified* | (11.9%) | 10 Asgard SMA Balanced | +4.4% |
| Upper quartile | (11.6%) | Upper quartile | +5.3% |
| Median | (13.4%) | Median | +4.2% |
| Lower quartile | (15.3%) | Lower quartile | +3.4% |
*QSuper Balanced also delivered 11.9% loss to super investors.
Source: Data extracted from Chant West website (www.chantwest.com.au)
Top-performing conservative pension fund options: According to Chant West, the top 10 conservative growth (21-40% in growth-style assets) investment options for PENSION funds over the past 12 months, and over the past 5 years, to 30 June 2009 are listed in the table below.
| Pension funds: Top 10 conservative growth investment options | |||
| Investment (Conservative Growth 21-40%) | 12 months to 30 June 2009 (loss) | Investment (Conservative Growth 21-40%) | 5 years to 30 June 2009 |
| 1 Asgard SMA Defensive Core | +1.2% | 1 Catholic Super Conservative | +6.9% |
| 2 EquipSuper Conservative | +0.7% | 2 Sunsuper Conservative | +6.2% |
| 3 FSS (NSW) Capital Guarded | +0.4% | 3 NGS Super Defensive | +6.0% |
| 4 Sunsuper Conservative | (0.6%) | 4 Auscoal Stable | +6.0% |
| 5 UniSuper Capital Stable | (1.1%) | 5 Asgard SMA Defensive | +5.9% |
| 6 REST Capital Stable | (1.6%) | 6 REST Capital Stable | +5.7% |
| 7 Asset Stable Growth | (1.8%) | 7 Health Super ST Conservative | +5.7% |
| 8 Health Super ST Conservative | (2.0%) | 8 QSuper Cash Plus | +5.6% |
| 9 CFS First Choice Conservative | (2.2%) | 9 UniSuper Capital Stable | +5.5% |
| 10 Tasplan ST Defensive | (2.4%) | 10 Catholic and Ret Conservative | +5.2% |
| Upper quartile | (1.9%) | Upper quartile | +5.8% |
| Median | (3.5%) | Median | +5.2% |
| Lower quartile | (4.3%) | Lower quartile | +4.4% |
Source: Data extracted from Chant West website (www.chantwest.com.au)
SuperRatings says…
The Chant West information contained in the tables above is as at 30 June 2009. According to SuperRatings, the top 10 balanced investment options over the past 5 years to 31 August 2009 were:
| Fund and Option Description | 5 years to 31 August 2009 per annum compound returns |
| 1 OSF Super – Mix 70 | + 7.2 % |
| 2 Catholic Super – Balanced | + 7.2 % |
| 3 Buss(Q) – Balanced Growth | + 7.1 % |
| 4 Local Super (SA/NT) – Growth Option | + 6.6 % |
| 5 Telstra Super Corp Plus – Balanced | + 6.6 % |
| 6 Cbus – Core Strategy | + 6.5 % |
| 7 NGS Super – Diversified | + 6.5 % |
| 8 AustralianSuper – Balanced Option | + 6.5 % |
| 9 CareSuper – Balanced | + 6.5 % |
| 10 Unisuper Accum (1) – Balanced | + 6.4 % |
| Top Quartile | + 6.2% |
| SuperRatings’ Median Index | + 5.4% |
| Bottom Quartile | + 4.2% |
| *Balanced Fund Options with between 60% and 76% of assets in growth style investments.All results are net of fees and tax. ^Interim Rate Returns. | |
Source: SuperRatings (www.superratings.com.au)
The investment returns and losses contained in the tables above are net of fees and taxes.
Super returns in the red, again
Investment performance: We’re the best super fund. No, we’re the best…
Comparing your super fund’s performance
Retail funds outperform industry funds in 2009/2010
Super funds deliver 10% for 2009/2010 year
Hi - I'm Trish Power, author of 
[...] So, kudos to SelectingSuper and Alex Dunnin for creating the three tables that appear in this article. The fees listed relate to the default investment option of the particular super fund, typically a balanced or growth option. (For an explanation of balanced and growth options see the article Mirror, mirror… what super fund is the best performing fund of all?) [...]