INVESTING

Telco's super fund beats the benchmark

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Telstra Super is the super fund run by Australia's biggest telco. While it's open only to Telstra employees or people who've been Telstra employees, because Telstra has for a long time been one of Australia's biggest and most important companies this covers so many people it effectively operates like a public offer fund anyway.

What it offers

Telstra Super has 11 investment options including five diversified, five asset class choices and a direct access option for members who want to invest directly in ASX shares, exchange traded funds or term deposits. Its MySuper option is simply one of its diversified choices which it allocates you into depending how old you are - meaning for MySuper it uses a life stage strategy.

telstra

Telstra Super is a full service fund catering to members and retirees of any age with flexible investments, discounted life insurance and financial planning. Yet most members pay a total fee of about only 0.9%.

Investment performance

A member who invested $10,000 in the Telstra Super balanced option 10 years ago would now have $17,100 in their account which is 5% more than if they'd invested in the average fund represented by the SelectingSuper MySuper default index. Ironically perhaps, if you'd invested in the growth option you'd have $600 less because the growth option was hit harder during the GFC.

For Telstra Super MySuper members this means that the more conservative balanced option used by middle age members has over the past decade outperformed the higher growth more aggressive options used by younger members although in the past five years the growth option has caught up and is now well ahead.

Rainmaker SelectingSuper's conclusion

Telstra Super is one of Australia's smartest, most reliable yet innovative super funds with sharp long term returns, low fees and advanced extra features. It easily earns its AAA SelectingSuper rating.

Key fund data

Size $17 billion 100,000 members   5 year performance 8.2% pa as at 30 June 2016 after fees
SelectingSuper rating AAA   Investment choices 11
Fees 0.9% in the MySuper option   Insurance choices 70

Alex Dunnin is executive director of research and compliance for Rainmaker.

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