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When it comes to comparing and selecting super funds, investment performance and low fees are necessary but not sufficient. You can find many articles on SuperGuide about the top performing or cheapest super funds (see the list at the end of this article), but your search shouldn’t end there.
The major super research houses (Chant West, Rainmaker and SuperRatings) have long recognised this, so they use their annual awards to draw attention to the super and pension funds that deliver not only on performance and fees, but also go further in some of the other services they deliver.
This may be due to the education and advice services the super fund provides, or some innovative investment options or products. It could be cost-effective insurance or simply top-notch customer support. What’s certain is it won’t be one thing, but a combination of factors that make one super fund stand out from the pack.
Even then, the overall winner of fund of the year may not be the one for you. For example, if you are looking for a pension fund then that sub-category will be of most interest. If the pension fund of the year is also the overall winner, or if more than one research house gives a particular fund a gong for best in category, then you could be on to a winner.
Despite the bad press that super funds sometimes get, ultimately they are legally obliged to act in the best interests of their members and the best super funds use that principle to continually improve their service.
In this article we report the Funds of the Year as chosen by Chant West, Money magazine (published by Rainmaker) and SuperRatings going back to 2013. For the latest year we’ll also list all the winners in other categories.
Funds of the Year: 2021 winners
This year the top awards have gone to three different funds, although each of the winners pop up as category winners or finalists elsewhere.
In one of the most challenging years on record due to the impact of COVID, AustralianSuper took out Chant West’s top gong for Super Fund of the Year as well as the award for Best Fund, Investments. UniSuper won the other major award, Pension Fund of the Year.
Last year’s Super Fund of the Year – SunSuper – excelled again, taking home a hat-trick of awards with wins in the Corporate Solutions, Advice Services and Member Services categories.
Chant West held their awards on 26 May 2021. Chant West’s Head of Research Ian Fryer said that this year Chant West has recognised funds that showed resilience. “We were looking for funds that have demonstrated they can manage an ever-changing environment in relation to investments, regulation and work practices in a way that continues to deliver strong member outcomes.”
Not only did the top funds successfully navigate volatile investment markets, but they also showed an ability to innovate and respond quickly when members’ needs change. This was evident in their efficient handling of the government’s early release of super scheme for members suffering financial hardship due to COVID. Despite the speed and volume of requests, no fund faced liquidity issues.
In the video below Ian Fryer talks about what set apart the top 3 finalists for super fund of the year.
Chant West’s Super Fund of the Year 2021 was announced last week at the awards as AustralianSuper.
AustralianSuper’s big strength is their investments. AustralianSuper has experienced investment professionals who have managed money in all different asset classes before at fund managers and now they’ve come across to AustralianSuper. And each of the asset classes that they manage money in, they’ve done really well. Both in Australian shares, international shares, fixed interest.
But perhaps one of the areas where AustralianSuper, and indeed a number of the big super funds do really well, is in the area of unlisted assets. Things like property, infrastructure and private equity. And while smaller funds might go to a fund that invest in an unlisted fund to access those investments, AustralianSuper is big enough that they can go direct and they can buy an infrastructure asset themselves, or they can go as a co-investor with a large international investor for one of these investments.
That gives them access to the sort of investments that a lot of smaller funds couldn’t get access to, and getting access at really low fees, which enables AustralianSuper to get really good results for members but by keeping the cost down of investing.
AustralianSuper’s performance over most periods has been outstanding. Over any period from five, seven, 10, 15 years. They are the top MySuper performer for your standard 70/30 investment option. So their investment model is really good and they’ve shown that in terms of performance over a long period of time.
One of the other things that AustralianSuper has done over the past few years is pull together a lot of the strands of member services so that they’re able to communicate to members in ways that are relevant to them and suggest actions for members that will grow their super in a personalised way.
In order to do that, AustralianSuper has had to corral a lot of the member information that they have. Not just account balances and investment options, but things like how a member interacts on the web, the sort of things they call the contact centre about, what they’re doing in terms of the member app. A whole range of other things. What AustralianSuper does is they get all that information, put it together and use algorithms to work out what is the most likely thing a member can do, which will give them the most benefit in terms of their superannuation.
And then they construct communications sent out to members to nudge them along that path. Have you thought about doing this? We say that this member services side is really important to drive positive behaviour that, if done well, can actually have a similar result as really good investment returns. If a member is putting more money in over a long period of time, that can have a big impact on someone’s retirement outcome.
The other two funds in terms of the top three for Super Fund of the Year were UniSuper and Sunsuper.
UniSuper has, once again, a world class investment team and have had people who have been working at the big fund managers and earning a lot of money now coming to manage money, especially in the Australian shares area for UniSuper members. UniSuper behaves a bit differently in terms of how they invest in Australian shares. Rather than just saying ‘we’ll invest in line with the market’, they’ll take positions of conviction. If there’s a company that they believe is undervalued, they’ll make a large investment in that.
Another thing they do is, rather than investing a lot in unlisted assets, unlisted property, unlisted infrastructure, they’ll look for listed vehicles that invest in similar assets and they’ll wait for those listed vehicles to get to a really good price, and then they’ll invest significant amounts of money there. The advantage they have there is that they’re investing at a low price and have had great success in getting really good returns from that.
UniSuper has a model which is in some ways more like the retail funds and more focused on listed assets rather than a lot of unlisted assets. But their performance has been outstanding for a long period of time. Over almost every period they’re in the top five performers of investments.
UniSuper has a really strong advice offering as well. One of the advantages they have is that they’re in a fairly small number of locations across Australia, or indeed their members are in a fairly small number of locations – all the universities across Australia.
Therefore they can put their staff in those universities and their advisers in those universities. So it makes it really easy for members to get access to the full range of advice – whether it’s general advice, just got a few questions, or whether it’s a full financial plan. A university member doesn’t have to go and find an adviser to help them. Their advisers are right there in the workplace.
Sunsuper has won Super Fund of the Year a number of times in recent years and, this year, once again, they were very close. But this year they just missed out. Sunsuper has a very strong investment model. Their focus in terms of listed assets is more focused on a lot of passive investment, investing in line with the market, and then some strong high conviction managers around that. But in terms of where they get most bang for their buck in terms of fees and also their risk budget is in their unlisted assets.
So similar to AustralianSuper, they invest a lot in unlisted assets all around the world. They’ve partnered with some of the best managers in terms of private equity and infrastructure around the world. And they have also done a lot in property both here and around Australia. Sunsuper once again has the scale. So they don’t have to go into a fund, but they can co-invest with a big manager or even go direct for some investments.
The other area where Sunsuper is very strong is member services, and indeed Sunsuper has won our member services award for several years in a row now. What Sunsuper does really well is, like we talked about with AustralianSuper, they corral all the information that they have about members. And then they work out based on what they know about each of these members, what is the thing that is going to make the most difference to their retirement outcome. And once they’ve worked that out, they communicate that to members through a range of different channels. They might put out a message, for example, to consider salary sacrificing. But that message won’t just be on an email the member gets. That message will also be if they call the contact centre, there will be a prompt to talk to them about that issue. That message will also pop up on member online.
So what they’re doing there is identifying what the member could be doing to most improve their retirement goals. And they’re communicating that in a consistent way across multiple channels. And the results have been outstanding in terms of the engagement and members taking action.
And one of the reasons why the engagement has been so strong is that they don’t just say, ‘here’s the message we’re going to send out’, but they package the message up in such a way that it’s really engaging. They might send a message out with some really strong and vivid words, but also images. They might send a message out which has a little widget so that members can say, well, what happens if I put this much money in, or that much money in. So to enable members to explore the ‘what ifs’. ‘What happens if I do this? What happens if I do that?’
Sunsuper, UniSuper and AustralianSuper are all very good funds, all very close to winning the top award. But this year we went for AustralianSuper.
Sunsuper won Money magazine’s Best Value Insurance in Super award and QSuper won both its Best Value MySuper Product and Best Value Super Fund for Young People awards, but its overall winner was Aware Super.
Money magazine announced its superannuation Best of the Best Awards 2021 on 3 December 2020, based on research by Rainmaker. Writing in the December 2020/January 2021 issue of Money, Rainmaker executive director of research Alex Dunnin said 2020 was a year that tested investment strategies like no other. “Smart super funds with shrewd leadership teams know that when the stakes are high their best strategy is to calm down, simplify and focus only on what they can control. They got their technology working, became more efficient, reduced costs, lowered overheads and made sure they were investing only in what they understood.”
In accepting the top award for the first time, Aware Super chief executive Deanne Stewart said the mergers of First State Super, VicSuper and WA Super had grown Aware Super’s membership to more than 1.06 million. Most are healthcare workers, teachers, police, firefighters and all those on the frontline of bushfires and COVID-19. “It’s been very motivating for the team. The year 2020 reminds us all how important essential workers and public servants are.
“We’ve taken a leadership role in affordable housing and we’ve now invested $250 million in affordable housing and that benefits thousands of Australians and is also a good investment for the fund. The other one we’ve taken a leadership position on is climate change – not just with a 2050 target, but what we’re doing now and over the next three years or decade to make the portfolio more sustainable.”
SuperRatings announced its 2021 Fund of the Year award winners on 29 October 2020. QSuper was the big winner, taking out Fund of the Year, Pension Fund of the Year and Smooth Ride, which is awarded to the fund that has best weathered the ups and downs of the market while also delivering strong outcomes.
Executive Director Kirby Rappell said: “It’s important to recognise the significant work that all funds have done to support their members through a very challenging year. In a highly competitive field, we decided that QSuper was the fund that performed most strongly across key criteria of investment performance, fees, member services, financial advice and insurance, and fund governance.”
Industry funds won all the other awards except for the Infinity Award (the fund most committed to addressing its environmental and ethical responsibilities), which was won for a record seventh time by Local Government Super, originally a public sector fund but now open to all.
In accepting the top award, Jason Murray from QSuper said: “It’s especially humbling to be named Fund of the Year this year, a year like no other. Many of our members are frontline workers. They do incredibly important jobs, but this year they were called upon to do the absolute extraordinary, for all of us. It inspires our relentless commitment to creating a better future for them through the good times and through tough ones.”
In many ways, QSuper’s unique investment strategy, which has been ten years in the making, proved its mettle in 2020. Although super funds may have similar-looking investment options, there is a wide variation in how they invest members’ money. While there is no single best approach to investing, as the saying goes, the hour maketh the man, or the super fund in this instance.
In the wake of the GFC, QSuper adopted an approach to risk that would soften the blow of big sharemarket falls. It has a much lower allocation to listed equities than other funds, with the difference made up of long duration bonds. The aim is to provide a smoother ride for members.
Funds of the Year: 2013 to 2021
In the table below you can find the Funds of the Year for the last eight years. As noted earlier, SuperRatings and Rainmaker announced their 2021 Fund of the Year in late 2020, while Chant West announced its 2021 winners in May this year.
Sunsuper have been consistent winners with six awards in total over the years. UniSuper is close behind having won five times, AustralianSuper and Hostplus have won four times, QSuper has won three times, while REST has won twice.
It’s notable that all funds are Industry funds, except for Telstra Super which is a Corporate fund. Aware Super and QSuper began as Public Sector funds but are now available to the general public).
|Year||Chant West||Money Magazine (Rainmaker)*||SuperRatings|
*Note: Prior to 2020 Rainmaker’s awards were known as the Selecting Super awards. There was no winner for 2020.
Sources: Chant West, Rainmaker and SuperRatings
Other award winners for 2021
Besides the Fund of the Year, each research house also awards funds for excelling in more specialist areas, such as pensions, investments and innovation.
Chant West (2021)
|Pension Fund of the Year||Unisuper|
|Advised Product of the Year||Netwealth|
|Corporate Solutions Fund of the Year||Sunsuper|
|Specialist Fund of the Year||Cbus|
|Best Fund: Investments||AustralianSuper|
|Best Fund: Member Services||Sunsuper|
|Best Fund: Insurance||Australian Catholic Super|
|Best Fund: Advice Services||Sunsuper|
|Best Fund: Innovation||QSuper|
|Best Fund: Integrity||Cbus|
|Best Fund: Longevity Product||Colonial First State FirstChoice Wholesale|
Source: Chant West
Money magazine (2021)
|Best MySuper Product||AustralianSuper|
|Best MySuper Lifecycle Product||Tasplan|
|Best Value MySuper Product||QSuper|
|Best Value Balanced Super Product||Rest Super|
|Best Value Super Fund for Young People||QSuper|
|Best Value Super Platform||Vision Super|
|Best Value Insurance in Super||Sunsuper|
|Best Value Death Insurance in Super||Vision Super / Virgin Money Super|
|Best Value Income Protection Insurance in Super||Colonial First State / AMG Super|
|Highest Super Performer||Colonial First State (Global tech option)|
|Best Growth Super Product||Unisuper|
|Best Balanced Super Product||HESTA|
|Best Moderate Super Product||Cbus|
|Best Australian Shares Super Product||IOOF|
|Best International Shares Super Product||WA Super|
|Best Property Super Product||Prime Super|
|Best Fixed Interest Super Product||Hostplus|
|Best Cash Super Product||AMG Super|
|Best Innovation ESG Investment Leadership||HESTA|
|Best ESG Super Product||HESTA|
|Best Innovation – ESG Trailblazer||Australian Ethical|
|Best Innovation – Community Partnerships||LUCRF|
|Best Pension Fund||Cbus|
|Best Value Retirement Product||Bendigo SmartStart Pension|
|Best Balanced Pension Product||HESTA|
|Best Moderate Pension Product||Cbus|
|Best Growth Pension Product||Cbus|
Source: Money magazine / Rainmaker
|Pension of the Year||QSuper|
|MyChoice Super of the Year||Sunsuper|
|MySuper of the Year||UniSuper|
|Career Fund of the Year||Cbus Super|
|Net Benefit||AustralianSuper and HESTA|
|Infinity||Local Government Super|