Best of the Best 2024: How we chose the winners
Identifying Australia's best superannuation funds, managed funds, exchange traded products, banking products, insurers and online share brokers is no easy task. There are hundreds of product providers and thousands of their products, choices and options to assess.
Rainmaker Information, publisher of Money, has been reviewing superannuation, managed funds and their investment managers for more than 20 years and this year we again led the reviews and assessments.
Reviewing each market segment requires a different approach, and here we describe how each segment was reviewed.
Money superannuation awards
There are more than 500 super products offering tens of thousands of investment choices. Money's superannuation awards span best performance, best value and most innovative as well as those funds that deliver the best-value insurance.
To find the top-performing super products, Rainmaker reviewed MySuper products and asset classes that include growth, balanced, moderate (capital stable), equities, property, bonds, cash and ESG investment options. MySuper products are default flagship options used by most employees for their employer-paid superannuation. They are the cornerstone of most fund members' retirement savings, holding half of all the super owned by working Australians.
MySuper comes in two flavours: diversified single-strategy products that spread your savings across all the major asset classes, and lifecycle products that invest your savings differently depending on your age.
Rainmaker identifies Australia's best-performing super products, MySuper single-strategy products and investment choices by assessing how they performed over the past 10, five and three years, as well as how they went over the 12 months to June 30, 2023. Rainmaker's proprietary composite scoring method enables us to reward consistency and spot the products that perform best over good times and bad.
MySuper lifecycle products were assessed in a similar way, except Rainmaker examined which products had the best overall rankings across options designed for fund members in their teens, 20s, 30s, 40s, 50s and 60s. The best lifecycle product was the one that ranked the highest across the age groups.
In 2022-23, superannuation funds staged an almighty recovery, delivering strong above-median returns amid global chaos. Coming straight after the horror of the 2021-22 financial year, when super had one of its worst years in terms of performance, just reminds us how quickly things can change and how robust Australia's best funds are.
The best-value super product for young people, meanwhile, is the best product when we look at the returns people in their 20s would have received, taking into account the fees that hit their lower account balance.
Identifying the lowest cost products is done by assessing the investment, administration and member fees a fund member would pay if they had $10,000, $50,000 or $100,000 in their super account. Zero-fee indexed options aren't actually free because members still pay fees to be in the fund.
Fees for retirement products, also known as pension products, were assessed by reviewing the fees they would pay if members had $100,000, $500,000 or $1 million in their account. That is, Rainmaker ranked funds on multiple account balances for super
and pension products.
To be eligible for the Money awards, a superannuation product must be a public offer and AAA-rated by Rainmaker.
Money managed funds and ETFs
When considering which managed funds or exchange traded funds (ETFs) to choose, investors are looking not just for funds that scored the highest investment returns but also managed their investment risks. This includes an assessment of which managed funds most protect your capital.
This multi-phase process requires Rainmaker to identify such factors as how much their performance changed month to month, how much and how often it went down versus up compared to the market and its peers, and study which ones get the highest returns per unit of risk.
This review was done over the short, medium and long term to June 30, 2023. The best investment managers or ETF providers are those that have the most funds shortlisted in the most major categories.
Money banking awards
This year's awards for banking products focused on flexible variable home loans and term deposits (TD). The information used to assess the products was sourced by Rainmaker at the end of September 2023.
Home loan mortgages were assessed using the annual average percentage rate (AAPR) applicable over 25 years with an 80% loan valuation ratio (LVR) for loans that offer an offset account.
TDs were assessed according to which paid the highest interest rates in two categories: short-term TDs that paid the best rates at maturity for terms shorter than 12 months and long-term ones that paid the best annual interest rates for terms longer than a year.
Money insurance awards
Insurance is one of the most important financial products you can buy. But it can be complex and hard to compare because premiums can vary according to the value of what you want to insure and how risky the insurer assesses you to be.
For example, your car insurance premiums can go up the more kilometres you drive, the younger you are, the more customised your car is and even what colour it is.
Home and contents insurance, meanwhile, is determined by where you live, the type of building it is, your home security system and whether someone is home during the day. In this era of increasingly intense weather events and natural disasters, being in bushfire- and flood-prone areas can severely add to your premium, too.
Most life insurance is now accessed through super funds. So, Rainmaker and Money have again reviewed which funds offer the best overall deals for all super fund members and which ones offer the best deals for death-only, death and TPD, and income protection cover for white-collar and professional men and women.
New insurance categories were added in this year's awards for cover that consumers can purchase directly from their insurer either through the internet or through a third-party marketing group.
Money online share broker awards
To find the best-value online share brokers, Rainmaker reviewed not just which charged the lowest fees but which also had the best and broadest features, had the most features, and gave you access to the most investment types using the widest range of account types.
How to buy a copy of the Best of the Best 2024 issue
The Best of the Best 2024 special issue is on sale from December 7.
It's available from all good newsagents and supermarkets, or you can order your copy from the Money shop!
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