The best and worst super funds in Australia revealed


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What is the worst super fund?

ANZ/OnePath (now IOOF) tops the list of the worst super funds for the sixth year in a row, according to Stockspot's annual Fat Cat Funds report, which looks at the performance of Australia's 500 largest superannuation multi-asset options offered by more than 100 of the largest super funds.

The independent analysis by Stockspot of the best and worst super funds found that 25% of the worst 40 funds were owned by ANZ. ANZ is followed by Perpetual with four "Fat Cat" funds, then StatePlus and AMP, with three each.

anz super best and worst super funds

Why are they the worst funds? Stockspot found that the average Fat Cat Fund charges 2% in fees every year. What this means is that a person in their 20s or 30s could lose more than $250,000 in fees, the equivalent of about 10 first class around the world trips, explains Chris Brycki, CEO of robo adviser, Stockspot.

Last year $17.87 billion could have been saved in member fees if default super had been invested in a low-cost index fund, says Brycki. That amounts to more than $85 billion over five years.

"ANZ's OnePath (now IOOF) again topped our list with the most Fat Cat Funds. Every year we pressure ANZ to reduce fees or move clients to better super options. Instead we have observed that many of their poor performing funds have increased (not shrunk) in size. We hope IOOF reduces the fees on these funds, "says Brycki.

"Conflicts of interest are rampant in Australian superannuation and cause Australians to lose hundreds of thousands in fees over their lifetime. In our submission to the Royal Commission we recommend government create a low-cost super fund for all default super money. This would be a start to creating a fairer super system."


Which are the best super funds?

Unisuper topped the Fit Cat Awards list with the most Fit Cat Funds. Stockspot found 80% of the top 40 Fit Cat Funds were industry or corporate super funds and include the Rio Tinto Staff Superannuation fund and Equipsuper. However, industry and corporate funds also made up 45% of the worst 40 funds.

Brycki strongly urges all Australians to check their super fees. He says to try to keep fees below 0.75% and recommends fund members take the right amount of risk for their age.

"For most people superannuation will probably be their biggest source of savings. It is vital you get your money working for you, not for the Fat Cat Fund managers," says Brycki.

"There are a lot of things you can't control in life, but you can control what you pay a super fund to manage your hard-earned money for you."

Stockspot found that only 13% of the 500 funds analysed performed better than a low-cost index fund over five years with similar fees and taxes. The comparison for balanced funds is even worse. Only 4% of balanced super funds could beat an equivalent index fund.

Brycki points out that superannuation managers can easily access index funds, yet many choose not to because of the conflicts of interest in the industry.

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Susan has been a finance journalist for more than 30 years, beginning at the Australian Financial Review before moving to the Sydney Morning Herald. She edited a superannuation magazine, Superfunds, for the Association of Superannuation Funds of Australia, and writes regularly on superannuation and managed funds. She's also author of the best-selling book Women and Money.
Cathy Williams
November 2, 2018 10.02am

What is the best pension fund super fund?

November 12, 2018 8.58am

This is a subjective question, best = cheapest or lowest volatility for return or highest return last year which may have been a performance anomaly
My recommendation is you need to look through the noise of our balanced fund is best and look at the risk that you are taking on to achieve that return and are you comfortable with that. Many "balanced" funds are actually growth funds with gearing in some assets (property)
Further the RG97 changes to reporting fees has now brought a lot of hidden fees into account

November 28, 2018 5.37pm

My understanding is that Industry funds are better than Retail funds as they have lower fees.
I'm looking to transfer my Super funds from the ANZ Smart Choice Super fund to an industry fund. What are the best performing industry funds & which have lower fees? Eg. I've heard the Australian Super fund is a good option.

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