Online investment adviser Stockspot released its annual Fat Cat Funds Report earlier this week assessing the performance of Australia’s largest superannuation funds.
The report, which has now been published for six years, rates superannuation funds based on how they have performed after fees over five years compared to funds of similar risk, dividing them into Fit Cat Funds (the best-performing funds) and Fat Cat Funds (the worst performing).
To highlight the difference fees can make to fund performance, the No.1 best performing fund can return twice as much to its members as the worst-performing funds.
The research shows there is a clear correlation between high fees and long-term underperformance with Fat Cat Funds generally having higher fees than Fit Cat Funds.
Poor fund performance comes predominantly from active management fees as well as higher administration and operating expenses than necessary.
“Too many Australians are unaware of the devastating impact high fees have on their long-term retirement savings,” Stockspot chief executive Chris Brycki said.
“Our research makes it clear that the scale of the conflicts of interest are deeply embedded in Australia’s financial institutions. This has led to a situation that will impact many Australians, who will never be able to afford a comfortable retirement due to unnecessary superannuation fees over their lifetime.
“The Royal Commission into Banking Conduct and the Productivity Commission has surfaced some of the reasons people end up in poor performing funds.
“Many relate to issues that arise when stakeholders including financial advisers, trustees, executive teams, fund managers and consultants have incentives that are not aligned with the people they represent – the fund members.”
Top 10 high-growth super funds
The top performing funds in this group had very little fixed income and cash. This helped them achieve returns of 12-14 per cent per annum.
|
Type |
Name |
5 Year Returns |
|
Retail |
MLC Superannuation Fund – MLC Horizon 7 Accelerated Growth Portfolio |
14.10% |
|
Industry |
Unisuper – High Growth |
12.56% |
|
Industry |
First Super – Shares Plus |
12.45% |
|
Corporate |
Rio Tinto Staff Superannuation Fund High Growth |
12.31% |
|
Industry |
Equipsuper – Growth Plus |
12.27% |
|
Industry |
Unisuper – Sustainable High Growth |
12.27% |
|
Industry |
Intrust Super Fund – Growth |
12.27% |
|
Industry |
Statewide Superannuation Trust – High Growth |
12.19% |
|
Industry |
Club Plus Superannuation Scheme – High Growth |
12.10% |
|
Industry |
Construction & Building Unions Superannuation – High Growth |
12.10% |
Top 10 balanced super funds
The top performers in this group had a 48 per cent allocation to fixed income and cash. This helped them achieve returns of seven to nine per cent per annum over five years.
|
Type |
Name |
5 Year Returns |
|
Industry |
Australian Super – Conservative Balanced |
8.46% |
|
Retail |
The Bendigo Superannuation Plan – Bendigo Balanced Index |
8.45% |
|
Industry |
Unisuper – Conservative Balanced |
7.91% |
|
Corporate |
Rio Tinto Staff Superannuation Fund Conservative Growth |
7.76% |
|
Industry |
Equipsuper – Balanced |
7.64% |
|
Industry |
legalsuper – Conservative balanced |
7.60% |
|
Industry |
First Super – Conservative Balanced |
7.54% |
|
Industry |
NGS Super – Balanced |
7.51% |
|
Industry |
MyLifeMyMoney Superannuation Fund Moderately Conservative |
7.42% |
|
Industry |
Austsafe Superannuation Fund CRF Capital Stable |
7.20% |
Bottom 10 high-growth funds
The bottom funds typically had more (15 per cent) cash and bonds and higher fees. The average fee was 2.2 per cent. This dragged performance down to six to eight per cent per annum.
|
Type |
Name |
5 Year Returns |
|
Retail |
OnePath Masterfund – OptiMix Balanced Trust |
6.12% |
|
Retail |
OnePath Masterfund – OnePath Managed Growth Trust |
6.31% |
|
Retail |
MLC Superannuation Fund – MLC Inflation Plus Portfolios – Assertive Portfolio |
6.78% |
|
Retail |
OnePath Masterfund – OnePath Active Growth Trust |
6.79% |
|
Industry |
Maritime Super – Moderate |
7.01% |
|
Retail |
OnePath Masterfund – OptiMix Growth Trust |
7.08% |
|
Industry |
Australian Catholic Superannuation and Retirement Fund – Balanced |
7.15% |
|
Corporate |
Commonwealth Bank Group Super – Balanced |
7.42% |
|
Public Sector |
Energy Industries Superannuation SchemePool A – Balanced |
7.67% |
|
Retail |
OnePath Masterfund – OnePath Select Leaders Trust |
7.94% |
Bottom 10 balanced funds
There was a mix of retail, industry, corporate and public sector funds in the Fat Cat list. The common theme is these funds charge higher than average fees.
|
Type |
Name |
5 Year Returns |
|
Retail |
OnePath Masterfund – OptiMix Conservative Trust |
3.58% |
|
Retail |
Perpetual WealthFocus Superannuation Fund – Perpetual Conservative Growth |
4.10% |
|
Public Sector |
AvSuper Fund – Conservative Growth |
4.90% |
|
Industry |
Maritime Super – Conservative |
4.95% |
|
Industry |
StatePlus Retirement Fund – Moderate |
5.00% |
|
Public Sector |
Energy Industries Superannuation SchemePool A – Conservative |
5.01% |
|
Corporate |
IAG & NRMA Superannuation Plan – Conservative |
5.20% |
|
Industry |
Labour Union Co-Operative Retirement Fund – Conservative |
5.29% |
|
Retail |
The Bendigo Superannuation Plan – Sandhurst BMF-Bendigo Conservative |
5.29% |
|
Retail |
Perpetual’s Select Superannuation Fund – Diversified |
5.31% |
Are any of your funds on the list? Are they on the best-performing or worst-performing list?
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