Note: Every 6 months, we update this article with the latest performance data on superannuation funds and pension funds, released by 3 rating agencies. This article contains the investment results for the best performing super funds up to 31 December 2016. For performance data relating to later months, refer to other SuperGuide articles.
A popular question from SuperGuide readers is: what is the best-performing super fund in Australia?
Every month, quarter, 6 months or 12 months, you can read about the best-performing super funds, the best value super funds or the best super fund over the long term (‘long term’ meaning anything from 3, 5, 7, 10 year or even 15 years) on SuperGuide, and in the daily newspapers.
Using the term ‘best’ is dangerous in any field because it involves some level of personal judgement, and the answer can change frequently depending on what you’re measuring, and when you’re making the assessment, especially when we’re considering the current volatile markets. Usually, there are a bunch of top-performing super funds over time rather than one particular super fund.
The answer to this popular question also depends on what timeframe you’re looking at, what type of returns you’re comparing (after fees and taxes, or gross), and what type of investment option (or asset allocation) you have chosen for your super money.
A more relevant question is: what super fund is the most appropriate super fund (or investment option) for my retirement needs? The original question then needs to be divided into two parts:
- how does the super world measure the best-performing super funds?
- how do you measure fund performance in relation to your own circumstances?
The first part of the question I answer in this article. The second part of the question I answer in another SuperGuide article Super for beginners, part 11: Is my super fund good enough?
Selecting an investment performance benchmark
Tip! When assessing the investment returns of super funds, the process is more effective if you have a benchmark available to compare how well the top super funds have performed against the average, and to compare the average and the top-performing funds, against your own super fund’s returns.
Around 80% of all Australians with superannuation accounts have their money invested in the default investment option of super funds. The default investment option is usually a ‘balanced’ or a ‘growth’ investment option (typically 60 to 80% invested in growth assets such as shares and property). The performance lists that you see in SuperGuide, and in the newspapers, usually rank the ‘balanced’ or ‘growth’ investment options of super funds because that is where most Australians have their super money. Most of the lists set out below, rank the ‘balanced’ or ‘growth’ options.
Note 1: According to SuperRatings, the median annual return for the default investment option for the 8 previous financial years (1 July to 30 June of following year) were:
- 2015/2016 financial year: 3.1% (gain)
- 2014/2015 financial year: 9.7% (gain)
- 2013/2014 financial year: 12.7% (gain)
- 2012/2013 financial year: 14.7% (gain)
- 2011/2012 financial year: 0.4% (gain)
- 2010/2011 financial year: 8.7% (gain)
- 2009/2010 financial year: 9.8% (gain)
- 2008/2009 financial year: negative 12.7% (investment loss)
- 2007/2008 financial year: negative 6.4% (investment loss)
Note 2: According to SuperRatings, the median annual return for the default investment option for the 5 previous calendar years (1 January to 31 December) were:
- 2016 calendar year: 7.3% (gain)
- 2015 calendar year: 5.6% (gain)
- 2014 calendar year: 8.1% (gain)
- 2013 calendar year: 16.3% (gain)
- 2012 calendar year: 11.7% (gain)
The award for the best super fund, according to…
The sections following within this article list selected performance rankings from 3 organisations:
- Chant West
1. SuperRatings performance tables
SuperRatings regularly provides median returns for the different asset allocations – High Growth, Growth, Balanced, Conservative Balanced, Capital Stable, Secure, Australian Shares, International Shares, Property, Diversified Fixed Interest, Cash and MySuper. MySuper asset allocation is generally the same as the SuperRatings Balanced asset allocation.
The investment returns are based on the median returns of the largest 50 (SR50 Index) or largest 25 (SR25 Index) super fund investment options under review by SuperRatings. A median is simply choosing the return for the fund in the middle of the list. According to SuperRatings, the SR50 Index and the SR25 Index are a “good guide to the actual return of the ‘average’ fund over the same time frames”.
Table 1: SuperRatings: Super Funds — median returns for balanced investment option (Latest Returns to 31 December 2016)
|Index Name||1 Year|
|SR50 Balanced (60-76) Index||7.3||6.9||9.8||7.6||5.1|
Past performance is not a reliable indicator of future performance.
Source: Data from SuperRatings, although table created by Trish Power. Visit the SuperRatings website for more information on the different indices.
Note: The ‘balanced’ option performance table for super funds (accumulation phase) in this article (tables supplied by SuperRatings) differ slightly from the Chant West performance tables for ‘growth’ options later in the article, due to the differing definitions of ‘balanced’ (60-76%, SuperRatings) and ‘growth’ (61-80%, Chant West).
SuperRatings –Top 10 ‘balanced’ super funds over 5 years
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 2016 are:
Table 2: Super Funds: Top 10 Balanced (60-76) options for 5 years as at 31 December 2016
|Fund Investment Option||Option Type||Return Period||Return|
|UniSuper Accum (1) – Balanced||Balanced|
|Cbus – Growth (Cbus My Super)||Balanced|
|HOSTPLUS – Balanced||Balanced|
|AustralianSuper — Balanced||Balanced|
|CareSuper — Balanced||Balanced|
|Telstra Super Corp Plus — Balanced||Balanced|
|Sunsuper for Life — Balanced||Balanced|
|REST – Core Strategy||Balanced (60-76)||5 year||10.7%||8|
|Equip MyFuture — Balanced Growth||Balanced|
|BUSSQ Premium Choice – Balanced Growth||Balanced|
Table note: All results are net of fees and tax and are for the 5 years ended 31 December 2016. Past performance is not a reliable indicator of future performance.
Table 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.
SuperRatings provide some performance data (free of charge) on super funds and pension funds. The latest calendar year reports cover performance over 1, 3, 5, 7 and 10 years as at 31 December 2016, and SuperRatings updates these performance tables monthly. You can access the SuperRatings Super Performance List and the Pension Performance List by visiting the SuperRatings website.
2. SelectingSuper Top 50 performance tables
SelectingSuper also produces benchmark indices that you can use to compare how well the top super funds have performed against the average, and to compare the average and the top-performing funds, against your own super fund’s returns.
SelectingSuper reports returns for the different asset allocations – 4 investment options (including the MySuper/Default investment option), and 6 asset classes.
SelectingSuper reports returns for SelectingSuper’s top 50 MySuper and default investment options (usually balanced or growth). SelectingSuper provides the top 50 super funds for other investment options as well. SelectingSuper provides benchmark returns for both superannuation funds and retirement (pension) funds. You can access the latest returns reported by SelectingSuper, by visiting the SelectingSuper website.
3. Chant West performance tables
Rating company, Chant West, produces slightly different benchmark indices compared with SelectingSuper and SuperRatings. Chant West provides benchmark median returns for five investment options – All Growth, High Growth, Growth, Balanced, and Conservative.
Table 3: Chant West – Median performance by super fund investment category to 31 December 2016 (%)
|Fund category||1 yr (%)||3 yrs (p.a.) (%)||5 yrs (p.a.) (%)||7 yrs (p.a.) (%)||10 yrs (p.a.) (%)||15 yrs (p.a.) (%)|
(100% growth assets)
(81–100% growth assets)
(61–80% growth assets)
(41–60% growth assets)
(21–40% growth assets)
Note: Table compares the median performance for each category in Chant West’s multi-manager performance survey, ranging from All Growth to Conservative. Performance is shown net of investment fees and tax. It does not include administration fees or adviser commissions.
Source: Chant West (www.chantwest.com.au)
For more information on the top-performing super funds, see the following SuperGuide articles:
- Mirror, mirror… what super fund is the best-performing fund of all?
- Top 10 performing super funds for 2016 calendar year (and previous years)
- Top 10 performing super funds for 2015/2016 financial year, and for past 10 years
- Super stars! Top 30 super funds over 5 years
- Retirement performers! Top 30 pension funds over 5 years