Time to read : 4 Minutes
Australia’s best and worst performing super funds are revealed in Stockspot’s annual Fat Cat Funds Report.
The report, now in its 10th year, compares more than 500 of Australia’s largest funds and looks at performance over a five-year period in different risk categories (growth, balanced and moderate).
What you need to know
Stockspot says that while recent initiatives such as the MySuper performance test are a win for consumers, the test covers only 80 super options, leaving hundreds of other funds unscrutinised.
The CEO and Founder of Stockpot Chris Brycki explains more:
“The information provided by superannuation funds is often murky, complex and tough to obtain."
“We find the worst-performing (Fat Cats) and the best-performing (Fit Cats) super funds.”
“All super fund members should check to see how much in fees they are being charged by their super fund. If it’s more than 1.5 per cent, then you are probably being ripped off."
🔎 Interesting: Stockspot’s research found that by choosing a fund that charges 1 per cent less in fees will leave you up to $245,000 better off in retirement.
Best performing funds
🥇Five funds received the Fit Cat rating for the best performing super funds overall. They are Qantas Super, UniSuper, HESTA, AustralianSuper and IOOF.
🥈A total of eight Qantas Super products were given the Fit Cat rating – more than any other – and Qantas Super handed the gong as best overall fund.
🥉UniSuper and HESTA each had four products in the Fit Cat category, while AustralianSuper and IOOF had three each.
Worst performing funds
By far the worst performing super fund was OnePath, with a total of nine products given a Fat Cat rating.
🙅 OnePath achieved the dubious honour through a combination of weak returns and high fees.
🙀 Other badly performing funds were Colonial First State (five products rated Fat Cat), AMP and ClearView (four products each).
🍋 “In our research, we’ve found that OnePath is the worst performing super fund in Australia,” Chris Brycki says.
👎🏽 “Unfortunately, for people stuck in funds like OnePath and AMP, they’ve been paying much higher fees, and those fees have eaten away their returns.”
The bottom line
This is another timely reminder to make sure you are with the right super fund for you.
According to MoneySmart a good super fund will:
Perform well over five years in comparison to other funds.
Have low fees, either as a percentage or dollar amount.
Include or offer: income protection, life insurance and total and permanent disability (TPD) cover.
Provide investment options for you to choose from. E.G. Ethical.
Offer other services, usually at an added fee, of things like professional financial advice.
Be aware: Withdrawing from a super fund's insurance can sometimes be tricky so it is always worthwhile to compare.
This article is republished with permission from Your Life Choices. Read the original article.
Disclaimer:
The information contained on this web page is of general nature only and has been prepared without taking into consideration your objectives, needs and financial situation. You should check with a financial professional before making any decisions. Any opinions expressed within an article are those of the author and do not specifically reflect the views of Compare Club Australia Pty Ltd.
