Australian super has earned an average 117 per cent since the global financial crisis, but some funds are doing better than others, according to new research.
While February presented the first negative monthly return (-0.3 per cent) for balanced option funds since January 2017, SuperRatings’ latest data noted that that dip was just one month in the nine years since the GFC.
In that period, the median balanced option fund delivered an average return of 9 per cent per annum, reflecting an accumulated growth of 117 per cent.
Meanwhile, members with growth option funds saw median returns of 9.9 per cent p.a., or an accumulated 134 per cent.
“If the volatility of the GFC resulted in a member switching from a relatively riskier growth option to a balanced option during the depths of the crisis in 2009, they would be approximately $17,700 worse off today (assuming a starting balance of $100,000),” SuperRatings said.
Nevertheless, SuperRatings cautioned against making investment decisions based on short periods of performance (i.e., choosing only among the best performing super funds over 5 years).
SuperRatings CEO Kirby Rappell said, “The lesson for superannuation members is that a focus on long-term performance is essential.”
“While members may feel unnerved by recent volatility, it is impossible to ignore the significant gains that super funds have delivered since the start of the bull market in 2009.”
Continuing, he said the volatility in February – while a negative for funds’ performance – had a negligible overall effect.
“After nine years, you might say the global share market rally is getting a bit long in the tooth, but this is at odds with the economic data, which is pointing to a strengthening economy,” Mr Rappell said.
“Market corrections, while they can cause members to panic, are often a necessary check against bubbles. What the recent volatility tells us is that the market is capable of self-reflection, and that investors are focused on valuations as well as the broader economic picture.”
Nevertheless, fund choice does matter, as the significant difference between the best and worst performing balanced funds proves.
SuperRatings observed that the worst performing fund only began outperforming inflation in 2013. If the worst performing balanced fund began with $100,000 in 2009, it would now be at $171,680.
By contrast, the best performing super fund would be at $234,799. That’s a difference of $63,119.
These are the top 10 public offer funds, as measured by SuperRatings over the 10 years to 31 January 2018.
Top 10 performing balanced funds over 10 years
| Fund and option | Return over 10 years |
| REST – Core Strategy | 7.0% p.a. |
| CareSuper – Balanced | 6.9% p.a. |
| AustralianSuper – Balanced | 6.8% p.a. |
| Equip MyFuture – Balanced Growth | 6.8% p.a. |
| HOSTPLUS – Balanced | 6.8% p.a. |
| Cbus – Growth (Cbus MySuper) | 6.7% p.a. |
| Catholic Super – Balanced (MySuper) | 6.6% p.a. |
| Sunsuper for Life – Balanced | 6.5% p.a |
| First State Super – Growth | 6.4% p.a. |
| AustSafe Super – MySuper (Balanced) | 6.3% p.a. |
| SR50 Balanced (60-76) Index | 5.9% p.a. |
Top 10 performing growth funds over 10 years
| Fund & option | Return over 10 years |
| CareSuper – Growth | 7.3% p.a. |
| Energy Super – Growth Option | 7.3% p.a. |
| HOSTPLUS – Shares Plus | 7.2% p.a. |
| Catholic Super – Moderately Aggressive | 7.1% p.a. |
| BUSSQ Premium Choice – High Growth | 7.0% p.a. |
| HESTA – Shares Plus | 6.9% p.a. |
| REST – Diversified | 6.9% p.a. |
| NGS Super – High Growth | 6.9% p.a. |
| AustralianSuper – High Growth | 6.8% p.a. |
| Equip MyFuture – Growth | 6.7% p.a. |
| SR50 Growth (77-90) Index | 5.8% p.a. |
For more information on the top super funds, read "Top 10 funds in 10 years: Super’s scorecard".
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