Fact checked
Everyone wants to know that their super fund is the best on the market. But what does it mean to be the “best” super fund? Learn how to compare Australian superannuation funds and find the best options with this guide.
This is a complicated question to answer, because the performance of super funds varies a great deal over the course of any given year. When you’re comparing super funds, you always need to look at the performance of each fund over a number of years – five to ten is a pretty standard.
Below is a table of the ten best performing Australian super funds (specifically the investment options) in the five years leading up to March 2021.
| # | Superannuation Fund (Balanced Investment option) | (Balanced Investment option) |
|---|---|---|
|
1 |
AustralianSuper |
9.77% |
|
2 |
Hostplus |
9.74% |
|
3 |
Unisuper |
9.36% |
|
4 |
Aware Super |
9.24% |
|
5 |
Sunsuper for Life |
9.21% |
|
6 |
Cbus |
9.19% |
|
7 |
Vision SS |
9.15% |
|
8 |
VicSuper FutureSaver |
9.06% |
|
9 |
Prime Super |
8.93% |
|
10 |
Equip MyFuture |
8.88% |
Now, while these figures provide a straightforward leader board of super fund performance, things are a little more complicated than that in reality.
For example, let’s look at data for one specific fund – Sunsuper’s “Super-Savings account” – as an example. If you examine the returns over the course of five years (this time we’ll use the data up to April 2021), you find out that the fund has had an impressive return rate of 9.16%, which gives it a solid spot on the top-ten ranking board. However, when you look into the returns year by year, you find out what that number really means…
| Year | Return |
|---|---|
|
2016 |
3.12% |
|
2017 |
12.30% |
|
2018 |
10.68% |
|
2019 |
8.58% |
|
-1.69% |
$4,157 |
|
2021 (Up to April) |
11.55% |
|
Overall |
9.16% |
So, at the same time that we’re comparing fund returns separated by a few hundredths of a percent, we’re also seeing year-to-year fluctuations in returns of nearly 14% – almost five hundred times that number. This tells us three very important things about the top performing super funds…
For this reason, while good returns (over time) might be a good reason to consider a given fund, it shouldn’t be the be-all and end-all. You should consider other factors as well.
Superannuation funds have many factors that make them more or less desirable, and each one has strengths and weaknesses in different areas, but you need to figure out which factors are most important to you.
In addition to the performance of the fund over a given time, there are three factors that people generally consider when weighing up if a fund is a good choice for them or not. These are:
Each of these can significantly affect how suitable an option is for a given person. For many, it’s as simple as “how much money will I have in my super fund when I turn 65?”, in which case fees and performance are probably going to be the main factors for you. However, others might decide that their money not being invested in fossil fuels is an absolute must, or that they definitely need affordable life insurance of a particular kind. For those people, fees and performance might be only a secondary consideration.
Lowest fees
Fees are important, as they can affect the return you see on your super a great deal. A difference of 1% in your annual admin fees can mean a difference of more than $100,000 your retirement savings.
One thing to remember is that superannuation fees aren’t just a flat rate: they can change depending on the amount of super you have. Admin fees for super fund can be regular flat fee (say, $500 per year, or $5 a week), a percentage of your super balance (maybe 0.5% of your current super) or often a combination of both. A fund with a $500 annual fee is a worse choice than a fund with a 0.5% annual fee until your super reaches $100,000, at which point it becomes a good choice that gets better each year.
In addition, there are other fees you can incur on your super, such as:
If you’re someone who likes to regularly change how your super fund is invested, a fund with lower investment switching fees becomes more valuable. To give you some perspective, the following is a list of the ten Australian super funds with the lowest fees as of mid 2020. It’s important to note, these figures are specifically for someone with a superannuation balance of $50,000 – so the “lowest fees” table for your situation might look different.
| # | Superannuation Fund | Annual Fees (based on $50k balance) |
|---|---|---|
|
1 |
AustralianSuper |
$238 |
|
2 |
Superestate |
$292 |
|
3 |
Bendigo SmartStart Super |
$323 |
|
4 |
ANZ Smart Choice |
$325 |
|
5 |
Kogan Super |
$335 |
|
6 |
Virgin Money Super |
$358 |
|
7 |
UniSuper Accumulation Super |
$361 |
|
8 |
Grow Wrap Super |
$365 |
|
9 |
MyNorth Super |
$366 |
|
10 |
MYONESUPER |
$395 |
Source: https://www.superratings.com.au/top-10-super-funds/
It’s also worth knowing that some of these funds aren’t available to the general public. For example, UniSuper is an industry superfund that’s only available to university employees and their family members.
Investment options
There’s a number of different things that people could be looking for when it comes to investment options for their super. They might be looking for the fund that gives them the most options for how my super is invested. They might want the fund which has investment options that are best for the world around them, or the question might simply be “which funds have the investment options that suit me best?”
For the first question, it’s generally the case that retail funds and large, publicly available industry super funds will have more versatility in their investment options, as that helps them attract customers. If that’s what you’re going for, it’s best to stay away from a MySuper account, which generally have good fees and returns but only one investment option (generally a balanced strategy with a mix of investment types).
Some funds will have the option of directly controlling your mix of investments, which can be a good option if you know what you’re doing and want to take the wheel. Ultimately, the way to have absolute control over the investment of your super would be to create a self-managed super fund – although that’s a huge investment of time, energy and finances.
If you’re asking about the best investment options for the world around you, you’re probably on the lookout for a fund with ethical investments. These are becoming far more popular now, and there are funds that offer an ethical option, and others that make a policy that all their super is invested ethically.
Be aware, though, that the term “ethical investment” means different things to different people, and there’s no industry standard for the term. Most super funds regard renewable energy vs fossil fuels and abuse of labour laws as ethical issues for example, but some ethical investment options will stay clear of investment in stem cell research, for example.
As for the fund whose options suit you the best, the investment options on your super are generally a trade-off of risk vs reward – the more risk you’re willing to accept, the higher returns you’ll normally get for your super. The catch is that if anything goes wrong, you’ll take a bigger hit – such as in 2020, when COVID-19 pandemic meant many funds had negative returns. Alternatively, you can opt for a more conservative investment strategy with less risk, although the returns will also be less.
Insurance
Many super funds have insurance products included as part of the superannuation package – most commonly income protection, permanent disability, and life insurance. It’s important to note that premiums will change depending on the customer and their situation. For example, below is a table of the ten best super funds for insurance premiums on death & total permanent disability insurance for 30-year-old males (as of June 2020) – for blue- and white-collar workers.
| # | Blue Collar Workers | White Collar Workers |
|---|---|---|
|
1 |
Catholic Super |
NGS Super - Industry Plan |
|
2 |
UniSuper Accumulation Super |
Catholic Super |
|
3 |
Equip - MyFuture |
AvSuper - Accumulation |
|
4 |
Intrust Super - Executive Super |
UniSuper Accumulation Super |
|
5 |
Virgin Money Super |
Equip - MyFuture |
|
6 |
Sunsuper for Life Business |
Intrust Super - Executive Super |
|
7 |
legalsuper Personal |
Virgin Money Super |
|
8 |
NGS Super - Industry Plan |
QSuper - Accumulation |
|
9 |
Rest Super |
YourChoice Super |
|
10 |
QSuper - Accumulation |
EmPlus - Personal Super |
As you can see, just the type of job you work in changes the list a fair amount, and the number three option for white collar workers (AvSuper) doesn’t even make the top ten list for blue collar.
Insurance policies also vary widely in areas such as the amount you’re covered for, the exclusions (are there causes of death that void my life insurance?), medical examinations required, and various other conditions. Between all these factors, it’s very hard to talk about the “best” insurance. For insurance that’s part of your super fund, you’re probably better off starting with “what do I need from an insurance policy, and who has that on offer?”, and working from there.
There’s a number of factors to weigh up when you’re sitting down to compare your super options, each of which can change how good a Super fund is for your specific situation.
A conservative investment strategy is about minimum risk – slow and steady wins the race. This generally means your money is used for things like home loans or business bonds. You won’t make heaps of money off it, but it’s a pretty safe bet that you’ll get your money back. Most conservative strategies will still have some more riskier, higher return investments in the mix.
This is the nice way of saying “high risk”. A growth investment strategy is focused on getting better returns sooner, which generally means investments like shares and property – high returns, but much more potential for things to go wrong. A growth strategy will generally still have some funds in safer investments.
Balanced is one of the most common options for super investment – and often the default option. It involves a mix of different investment types that gives you a healthy return without too much financial risk. Many funds also have “Balanced Growth” and “Balanced Conservative” options, in case you want to lean a bit more toward one or the other.
A life cycle strategy is a little more involved than other options. It’s designed to work over someone’s whole working life. The idea is to start with high risk, high return investments early in life (when you don’t have a lot to lose, and there’s time to recover from bad years), and then move progressively to a more conservative strategy as you approach retirement – when you have more to protect.
These accounts are the “autopilot” option for super funds. They generally have reasonably good fees and returns, but only one option for an investment strategy (which is generally some kind of balanced option, set by the fund). They’re a good choice for anyone who doesn’t want to worry about investment strategies, and is happy to leave that to the fund managers.
Quantum Savvy Pty Ltd (ABN 78 660 493 194) trades as Savvy and operates as an Authorised Credit Representative 541339 of Australian Credit Licence 414426 (AFAS Group Pty Ltd, ABN 12 134 138 686). We are one of Australia’s leading financial comparison sites and have been helping Australians make savvy decisions when it comes to their money for over a decade.
We’re partnered with lenders, insurers and other financial institutions who compensate us for business initiated through our website. We earn a commission each time a customer chooses or buys a product advertised on our site, which you can find out more about here, as well as in our credit guide for asset finance. It’s also crucial to read the terms and conditions, Product Disclosure Statement (PDS) or credit guide of our partners before signing up for your chosen product. However, the compensation we receive doesn’t impact the content written and published on our website, as our writing team exercises full editorial independence.
For more information about us and how we conduct our business, you can read our privacy policy and terms of use.
© Copyright 2024 Quantum Savvy Pty Ltd T/as Savvy. All Rights Reserved.
© Copyright 2024 Quantum Savvy Pty Ltd T/as Savvy. All Rights Reserved.
Quantum Savvy Pty Ltd (ABN 78 660 493 194) trades as Savvy and operates as an Authorised Credit Representative 541339 of Australian Credit Licence 414426 (AFAS Group Pty Ltd, ABN 12 134 138 686). We are one of Australia’s leading financial comparison sites and have been helping Australians make savvy decisions when it comes to their money for over a decade.
We’re partnered with lenders, insurers and other financial institutions who compensate us for business initiated through our website. We earn a commission each time a customer chooses or buys a product advertised on our site, which you can find out more about here, as well as in our credit guide for asset finance. It’s also crucial to read the terms and conditions, Product Disclosure Statement (PDS) or credit guide of our partners before signing up for your chosen product. However, the compensation we receive doesn’t impact the content written and published on our website, as our writing team exercises full editorial independence.
For more information about us and how we conduct our business, you can read our privacy policy and terms of use.
