Each year, the superannuation regulator releases the latest performance data on the largest 200 superannuation funds in Australia. In January 2014, the Australian Prudential Regulation Authority (APRA) published its fourth annual report into the investment performance of Australia’s super funds spanning the 10-year period, and 5-year period, to 30 June 2013.
The report makes interesting reading because you can discover the top-performing super funds over 10 years, and over 5 years to 30 June 2013. You can also discover where your super fund ranked against the top performers, if your super fund didn’t make the top 25 or so top-performers.
According to APRA, the 200 largest super funds represent 99.9% of APRA-regulated funds (excluding certain categories), and account for just under 60% of all super fund assets. Note that self-managed super funds (SMSFs) represent just over 31% of all super fund assets, which means that the 200 largest super funds and SMSFs control around 90% of all super assets. More significantly, the largest 20 (twenty) super funds, plus SMSFs, control a massive 70% of all super money in Australia.
The rates of return, listed in the tables below, represent the net earnings on superannuation benefits.
Note: When reading the tables below, note that if a super fund in the list has 100% of its money invested in the default investment option of the fund, or the majority of the fund’s super money invested in the default option, then the rate of return published by APRA generally reflects the true performance of that fund. (The default investment option is typically a balanced or growth investment option.) If you belong to a super fund that offers many investment options, and the super money is invested across all of these options, then the rates of return appearing in the tables below, and in the APRA report, may not represent the true performance of your super fund. According to APRA, these statistics are not designed to provide individual members with information to compare the investment options offered by super funds.
You can check out the following tables (and explanatory text) in this article:
- Table 1: Top 25 performing super funds over 10 years (to 30 June 2013).
- Table 2: Top 25 performing super funds over 5 years (to 30 June 2013)
Table 1: Top 25 performing super funds over 10 years
The winner in the long-term investment performance stakes is the super fund for employees of Goldman Sachs and JBWere, delivering an average rate of return (ROR) of 10.5% each year, over the 10-year period to 30 June 2013. This is particularly impressive considering the global financial crisis (GFC) starting in late 2008 knocked the value of shares, other listed investments and structured products. The 10-year returns also include the pre-GFC boom years.
The runner-up is another corporate fund, looking after the super benefits of the employees of the Commonwealth Bank, and delivering an average ROR of 8.1% each year, over the 10-year period to 30 June 2013. The equal-third placegetters are: another corporate super fund, looking after the super needs of the employees of Worsley Alumina, and delivering an average ROR of 8.0% each year, for the 10-year period; and Unisuper, an industry super fund for the university sector also delivering an average ROR of 8.0% each year.
Only one retail super fund appeared in the top-25 performers over 10 years, ranking at equal twentieth with an average ROR of 7.1% each year, for the 10-year period to 30 June 2013 (Perpetual WealthFocus Superannuation Fund). Set out below is the breakdown of fund types for the top 25 performers (which for this table is a list of 27 funds due to some super funds ranking equally):
- Corporate super funds (7)
- Industry super funds (11)
- Public Sector funds (6, with 3 of these public sector funds ranking equally at 22)
- Retail super funds (1)
Note: The running costs of corporate super funds, and public sector funds, are often subsidised by the employer, which may or may not explain the performance dominance of these two types of super funds, considering they are the smallest sectors in the super market. Corporate super funds and public sector super funds often have limited investment options, which means the majority of super money is held in the default strategy which may also explain why corporate funds feature prominently in the top 10 performers over 10 years (5 super funds are corporate funds). Although the corporate super funds ranked number 2 and 3 only had 38.4% and 22.8% (respectively) of total assets invested in the default strategy, and the industry fund that also ranked third, only had 22.8% of fund assets in the default strategy. For an explanation of the different types of super funds see the SuperGuide article, Comparing super funds: Who’s who in the super zoo.
|Table 1: Top 25 performing super funds over 10 years (to 30 June 2013)|
|Ranking||Name of super fund||Fund type||Proportion of total assets in default strategy (%)||10-year per annum ROR (%)|
|1||Goldman Sachs & JBWere Superannuation Fund||Corporate||98.9%||10.5%|
|2||Commonwealth Bank Group Super||Corporate||38.4%||8.1%|
|3||Worsley Alumina Superannuation Fund||Corporate||41.1%||8.0%|
|5||Clough Superannuation Fund||Corporate||100%||7.7%|
|6||Catholic Superannuation Fund||Industry||59.4%||7.5%|
|8||Local Government Super Scheme||Public Sector||48.6%||7.4%|
|8||United Technologies Corporation Retirement Plan||Corporate||74.3%||7.4%|
|11||Construction & Building Unions Superannuation (Cbus)||Industry||99.1||7.3%|
|11||National Australia Bank Group Superannuation Fund A||Corporate||56.5%||7.3%|
|11||Reserve Bank of Australia Officers Superannuation Fund||Public Sector||2.6%||7.3%|
|15||BHP Billiton Superannuation Fund||Corporate||55.4%||7.2%|
|15||BlueScope Steel Superannuation Fund||Corporate||71%||7.2%|
|20||Perpetual WealthFocus Superannuation Fund||Retail||76.4%||7.1%|
|20||Public Sector Super Scheme||Public Sector||99.3%||7.1%|
|22||Australia Post Superannuation Scheme||Public Sector||13.9%||7.0%|
|22||Coal Industry Superannuation Fund||Public Sector||99.0%||7.0%|
|22||CSS Fund||Public Sector||88.5%||7.0%|
|22||Health Employees Superannuation Trust Australia (HESTA)||Industry||79.2%||7.0%|
|22||Rio Tinto Staff Superannuation Fund||Corporate||57%||7.0%|
Source: Extracted from Table 1b, APRA Statistics, Superannuation Fund-level Rates of Return June 2013 (issued 8 January 2014)
Table 2: Top 25 performing super funds over 5 years (to 30 June 2013)
Based on the APRA tables, the 5-year performance figures to 30 June 2013 for superannuation funds were not great, due to the 5-year period covering the years spent trying to recoup the losses from the world’s financial meltdown in 2008 (also known as the GFC).
According to APRA, the top-performing super fund over 5 years to 30 June 2013 delivered a decent rate of return (ROR) each year of 7.7%, the next top-performing super fund over 5 years delivered a respectable 7.2% and then the investment performance of the remaining top-performers drops to 5.9%, 5.6%, and 5.5%, and then followed by low 5% returns, and high 4% returns.
The most disturbing aspect to the top-25 super performers is that, generally speaking, the super funds where most of Australia has their retirement savings do not appear in the top-25 list. Apart from major fund exceptions like Care Super, REST, Unisuper and Local Government Super Schemes, the super funds that made the list include the following:
- Corporate funds (16) – the only major fund in this group is the Commonwealth Bank Group Super, the super fund for CBA employees
- Retail funds (2) – these two funds hold $850 million, and $1.9 billion and are not considered major funds
- Industry super funds (6) – includes major funds, Care Super, REST, Unisuper
- Public sector funds (2) – includes Local Government Super Scheme
The winner in the long-term (5 year) investment performance stakes is the corporate CBH Superannuation Fund delivering a rate of return of 7.7% each year, for the 5-year period to 30 June 2013. The runner-up is also a corporate fund (Goldman Sachs & JBWere Superannuation Fund) delivering a ROR of 7.2% each year, for the 5-year period to 30 June 2013. The third placegetter in the 5-year tables is another corporate super fund, looking after the super needs of the employees of the Uniting Church, and delivering an average ROR of 5.9% each year, for the 5-year period.
Set out in the table below is the top 25 performers (which for this table is a list of 26 funds due to some super funds ranking equally).
|Table 2: Top 25 performing super funds over 5 years (to 30 June 2013)|
|Ranking||Name of super fund||Fund type||Proportion of total assets in default strategy (%)||5-year per annum ROR (%)|
|1||CBH Superannuation Fund||Corporate||99.9%||7.7%|
|2||GoldmanSachs & JBWere Superannuation Fund||Corporate||98.9%||7.2%|
|3||Uniting Church in Australia Beneficiary Fund||Corporate||98.8%||5.9%|
|4||Challenger Retirement Fund||Retail||100%||5.6%|
|5||Retail Employees Superannuation Fund||Industry||85.4%||5.5%|
|6||BHP Billiton Superannuation Fund||Corporate||55.4%||5.1%|
|6||Elphinstone Group Superannuation Fund||Corporate||80.3%||5.1%|
|6||United Technologies Corporation Retirement Plan||Corporate||74.3%||5.1%|
|9||Commonwealth Bank Group Super||Corporate||38.4%||5.1%|
|9||IRIS Superannuation Fund||Industry||39.6%||5.0%|
|9||Perpetual WealthFocus Superannuation Fund||Retail||76.4%||5.0%|
|13||The Victorian Independent Schools Superannuation Fund||Industry||57%||4.9%|
|15||Holden Employees Superannuation Fund||Corporate||13.5%||4.8%|
|17||Bluescope Steel Superannuation Fund||Corporate||71%||4.7%|
|17||Dow Australia Superannuation Fund||Corporate||58.9%||4.7%|
|17||Mars Australia Retirement Plan||Corporate||97.7%||4.7%|
|17||Worsley Alumina Superannuation Fund||Corporate||41.1%||4.7%|
|22||Citibank Australia Staff Superannuation Fund||Corporate||70.8%||4.6%|
|22||Local Government Superannuation Scheme||Public Sector||48.6%||4.6%|
|24||Kellogg Retirement Fund||Corporate||100%||4.5%|
|25||Reserve Bank of Australia Officers Superannuation Fund||Public Sector||2.6^||4.4%|
|25||Rio Tinto Staff Superannuation Fund||Corporate||57%||4.4%|
Source: Extracted from Table 1a, APRA Statistics, Superannuation Fund-level Rates of Return June 2013 (issued 8 January 2014)