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).
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.
“Despite the importance of superannuation, the information provided by superannuation funds is often murky, complex and tough to obtain,” says Chris Brycki, founder and CEO of Stockspot.
“This is why we produce the annual Stockspot Fat Cat Funds Report.
“We find the worst-performing (Fat Cats) and the best-performing (Fit Cats) super funds. It’s the only report in Australia that analyses such a wide breadth of superannuation options.”
Bigger isn’t always better
Having your money with a large super provider was no guarantee of big returns. In fact, sometimes it was the opposite.
The report found no evidence that larger funds outperform smaller ones. It noted that mergers between funds did not necessarily boost performance or reduce fees.
Fees are everything
A key factor in determining whether a fund is a Fat Cat or a Fit Cat is the fees. Small differences in fees can translate to big differences in your nest egg.
“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,” Mr Brycki says.
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,” Mr 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.”
Do you have your super with any of the worst performers? What would it take for you to consider a switch? Let us know in the comments section below.