Superannuation underpins your retirement, determining the lifestyle you’ll lead. So finding the right fund to meet your individual needs is essential.
Navigating the labyrinth of options can be daunting, but comparison website Finder has done its best to help by determining the best fund in each of six categories as part of its Finder Superannuation Awards 2023.
The six categories are: low-fee funds, balanced funds, conservative funds, conservative balanced funds, high-growth funds and single asset class funds. Fees for those accounts were determined on a hypothetical $50,000 account balance.
Balanced funds – Aware Super Balanced Socially Conscious Fund
Despite the name, a balanced super fund usually contains around 70 per cent growth assets such as real estate or shares, and 30 per cent in defensive assets like cash to protect against lean years.
Finder gave the gong for best balanced fund to Aware Super’s Balanced Socially Conscious Fund, which has delivered returns of 8.4 per cent over 10 years and 7.06 per cent over five years. Annual fees for this option are $327.
Low-fee funds – Hostplus Indexed Balanced
Low-fee funds, as the name suggests, aim to minimise fees paid by members. Hostplus’s Indexed Balanced claims the crown in this category with a frugal annual fee of just $122. Over the long-term, the fund recorded an impressive 10-year return of 9.21 per cent, increasing slightly to 9.33 per cent over five years.
Conservative funds – HESTA Conservative
Conservative super funds direct more of the investment into relatively safe, defensive assets such as cash, bonds and fixed interest, with a lower equity component. Growth asset allocation is usually no more than 30 per cent. The aim is to minimise the risk of any losses.
The top performer in this category is HESTA Conservative, charging an annual fee of $362 with an average annual return of 5.45 per cent over 10 years and 4.28 per cent from the past five years.
Conservative balanced fund – AustralianSuper Conservative Balanced
A mixture of a conservative and a balanced fund, these investment options are slightly more risk-averse than a regular balanced fund, but with a larger risk appetite than a truly conservative option. Growth assets in this category are usually set between 41 and 60 per cent.
Finder says AustralianSuper’s Conservative Balanced option gets the top rank here, with yearly fees totalling $367 and robust returns of 6.74 per cent over 10 years, and 5.04 per cent over five years.
High-growth funds – UniSuper Sustainable
High-growth super funds are the riskiest option. But with high risk comes the potential for high reward. These funds predominantly allocate 85 per cent of funds into shares and the remainder into defensive assets, making it suited to risk-loving (or just younger) investors.
UniSuper Sustainable High Growth claimed the win in this bracket, with fees of $296 annually and a stellar performance averaging returns of 10.36 per cent over 10 years, and 8.48 per cent over five years.
Single asset class funds – Australian Retirement Trust, International Shares Index (unhedged)
You probably won’t be surprised to learn these funds invest all your money into a single asset class. There are funds that invest solely in shares, residential property, infrastructure or even cash deposit interest.
The winner in this category was Australian Retirement Trust’s International Shares Index (unhedged), which invests solely in non-Australian stocks. This option charges annual fees of $192.40 and has delivered outstanding returns of 12.26 per cent over 10 years and 10.13 per cent over five years.
Is your super option on this list? How has your fund performed over the past five or 10 years? Let us know in the comments section below.
Also read: Super fees drop to historic lows