Poorest performing super funds revealed

‘When retirement arrives, it won’t be a good feeling’.

man shocked at poor super performance

The 40 worst performing superannuation funds hold $5.5 billion and charge Australians a staggering $117 million in fees each year.

Online investment adviser stockspot.com.au has released its eighth annual Fat Cat Funds Report, revealing the worst performing and best performing funds for 2020.

The research found that fees and poor performance could result in individuals losing up to $200,000 by the time they reach retirement age.

AMP, which has been listed in the worst-performing funds for every year the report has been compiled, topped the list as the worst fund this year, followed by OnePath and Macquarie.

Stockspot measures a poorly performing fund (what it terms a Fat Cat fund) as one that has been in the bottom 10 performing funds within a particular risk group (balanced, growth, etc) over five years.

A good investment fund is one that is in the top 10 funds within a risk group over the same period of time.

Not only did AMP top the list of the worst investment funds, it also made history by being the first Fat Cat fund to deliver a negative return over five years with one of their options delivering a total return of -2.2 per cent.

AMP (12) and OnePath (11) account for more than half of the top 40 worst-performing funds.

According to the Stockspot research, a typical Fat Cat fund charges 2.13 per cent in fees while a typical Fit Cat fund (referring to a strong super investment option) charges 0.97 per cent.

Unisuper was recognised as having the most top performing super funds over five years (seven), followed by IOOF (five) and Australian Super (four).

Report author Chris Brycki said the one thing that the best performing super funds had in common was that they all charged less than 1 per cent in fees per year.

“Superannuation is the biggest investment most Australians have, yet most people have no idea how much they stand to lose if they’re in a Fat Cat fund,” Mr Brycki said.

“One of the golden rules of superannuation is: the less you pay, the more you get. Always pay less than 1 per cent p.a. in fees so your super isn’t eroded by high fees.

“Unfortunately, there are almost twice as many high-fee funds (more than 1 per cent p.a. in fees) than low fee funds (less than 1 per cent p.a. in fees).”

Mr Brycki also notes that people can be reticent to change, and even when they know they’re in a Fat Cat fund, prefer to turn a blind eye than spend the 10 minutes required to save themselves serious cash in the future.

“Sadly, in the eight years of naming the worst performing Fat Cat funds, few people have moved out of these funds,” he explained.

“Retirement may seem a while away, but when you get there and realise you could have been $200,000 richer, it won’t be a good feeling.”

Do you have money invested in an AMP or OnePath super fund? Are you now worried about what your nest egg will look like in retirement?

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    COMMENTS

    To make a comment, please register or login
    KSS
    23rd Sep 2020
    10:45am
    Nope not in either.

    23rd Sep 2020
    10:58am
    not in either and my find in is top 10 and fee is 0.33% and doesn't invest in nrenewables scam
    Aussiefrog
    23rd Sep 2020
    11:46am
    Sounds good, which fund is it may I ask?
    johnp
    23rd Sep 2020
    2:48pm
    Yep; as with others here, waiting breathlessly for that list of funds. Sort of only half a report by YLC !! Anyway had look around and here is a start.
    https://blog.stockspot.com.au/best-performing-super-funds/#worst
    ex PS
    23rd Sep 2020
    3:27pm
    Just confirms what a lot if us allready know, stick with Industry Funds.
    I am so glad I switched from National Mutual to Q Super when given the choice.
    I doubt very much if would have been able to retire at 55 if I had not done so.
    Anonymous
    23rd Sep 2020
    4:32pm
    Aussiefrog - mine is an industry fund - Telstra Super
    Anonymous
    23rd Sep 2020
    4:34pm
    Hey ExPS - 20 year ago I switched as well I was in Colonial,BT, National Mutual and Norwich
    Aussiefrog
    23rd Sep 2020
    4:49pm
    ex PS I found Qsuper fantastic
    Sundays
    23rd Sep 2020
    7:04pm
    I’m happy with QSuper too. Not just their returns but call centre too
    Horace Cope
    23rd Sep 2020
    10:58am
    "Do you have money invested in an AMP or OnePath super fund? Are you now worried about what your nest egg will look like in retirement?"

    We're with an industry fund and we're not worried about our funds or the return on the investments made by the fund. I might point out that the fees in our fund are roughly just under 2% and I mention this because the "staggering $117 million in fees each year" shown in the article for poor performing funds is roughly just over 2%. Fees are not tied to the return but are a fixed figure.
    cupoftea
    23rd Sep 2020
    12:46pm
    I am in industry fund and would not change either
    Buggsie
    23rd Sep 2020
    11:04am
    Used to have money in First State Super and paid about $5,000 in fees, transferred to Australian Super and paid about $2,400 for a better return. Yes, an industry fund, you know, the ones that Prime Minister Scumbag wants to get rid of? Not part of the Old Boys Network that runs AUS, I expect.
    Horace Cope
    23rd Sep 2020
    3:49pm
    First State Super is also an industry fund and is now known as Aware.
    inextratime
    23rd Sep 2020
    11:07am
    So where is the complete list ?
    Aussiefrog
    23rd Sep 2020
    11:45am
    Good question, I was asking myself also!
    arbee
    23rd Sep 2020
    1:57pm
    Exactly my thoughts as well. Their header says, Ben reveals all, but all I can see is two bad funds and about three good funds mentioned. Wonder how much of it is linked to who advertises on here and who doesn't. All would generally mean a comprehensive listing, not cherry picking.
    ex PS
    23rd Sep 2020
    3:30pm
    You will probably find that if there is a charge to access the complete list it would not be legal to publish it in an open forum.
    If you want it that badly just pay for it.
    Anonymous
    23rd Sep 2020
    4:35pm
    hey gents you can do a google search and come up with some lists
    Aussiefrog
    23rd Sep 2020
    11:47am
    Mmmmm, where is the complete list?
    Garyand
    23rd Sep 2020
    11:53am
    Whilst mine is a smaller industry fund and rates worthy of the top 10ers (7.44% growth over 5 years), proud to say that they invest in local infrastructure and renewables.
    RayL
    23rd Sep 2020
    12:06pm
    Sadly this article does not include a link to the complete list.

    Anyone know where to get the complete list?
    midnight
    23rd Sep 2020
    12:31pm
    For those people enquiring about the Super Funds report. The web site is listed in the second paragraph. FAT CAT FUNDS REPORT. Click on that. If you go there you can register to get the book information.
    arbee
    23rd Sep 2020
    1:59pm
    Sure, and what will we be charged for that privilege.
    Scott
    23rd Sep 2020
    12:35pm
    Comrade Cope, politically correct as usual!
    That's the way
    ex PS
    23rd Sep 2020
    3:32pm
    Is that Scotty from marketing???
    Times are tough when you have to do your own trolling.
    Anonymous
    23rd Sep 2020
    4:36pm
    Scott - your with the majority and that is all that matters
    ChannelingOrwell
    23rd Sep 2020
    12:48pm
    Warren Buffet recommends ... “My advice to the trustee [of my will] could not be simpler:
    Put 10% of the cash in short-term government bonds and 90% in
    a very low-cost S&P 500 index fund."

    I'm currently invested in the Vanguard Australian Shares High Yield exchange traded fund with annual fees of 0.25%.

    Also currently waiting for a decent market pullback (October hopefully) when I will expand my investments into index funds such as BetaShares A200 which tracks the Australian S&P/ASX 200 and has fees of 0.07%, and possibly the iShares Core S&P 500 which tracks the US S&P 500 index and has fees of 0.07%.

    Maybe even a global index fund such as theBetaShares Global Quality Leaders which has fees of 0.35%
    Garyand
    23rd Sep 2020
    5:18pm
    Vanguard looks pretty amazing! Should be a game changer when they enter the Aus Super market.
    Cheezil61
    23rd Sep 2020
    1:08pm
    Lakes you wonder who superclass designed for & who benefits the most from working people's hard earned money
    Cheezil61
    23rd Sep 2020
    1:13pm
    Recommenting (damn auto correct!)

    Makes you wonder who super was designed for & who actually benefits the most from working people's hard earned money
    greenie
    23rd Sep 2020
    3:46pm
    '...reticent to change...'?
    How about 'resistant'.
    BillW41
    23rd Sep 2020
    3:50pm
    My pension annuity is with OnePath, which IOOF has recently taken control of from ANZ. I hope fees fall accordingly. At least I sold my AMP shares a couple of years ago for $5 each!
    Aussiefrog
    23rd Sep 2020
    5:35pm
    Here's the report

    https://stockspot.us7.list-manage.com/track/click?u=41e390cbcda5105d9e30e3d43&id=b96092250c&e=11dfbd10da
    Clarabelle
    23rd Sep 2020
    6:52pm
    Thanks for the link Aussiefrog
    David
    23rd Sep 2020
    8:22pm
    My wife and & I approached our bank (ANZ) prior to the GFC about establishing a not so insignificant share portfolio & the financial advisor attached to ANZ strongly recommended a portfolio of shares known as One Path which proved to be a total disaster. We distinctly recall him saying you should double your investment in a year which I replied that was tantamount to crystal ball gazing. A few months later the GFC and our capital quickly spiralled to a little over one half of what we initially took out. Knowing not to cash in we stuck with this dudded portfolio of shares for a few more years and in the end sold them all as this One Path portfolio continued to haemorrhage. Needless to say the ANZ advisor made no contact with us whatsoever and left the ANZ. We would not touch One Path again!!!
    KSS
    24th Sep 2020
    7:40am
    Hmm...So David, you were given advice that even at the time you received it you were suspicious of calling it "chrystal ball gazing" and yet you acted on that same advice investing in it. Was it the 'double your investment in a year' promise that got you over the line to ignore your own instinct?

    Sorry for your loss but it was YOUR decision to take the action you did. No point blaming the bank or One Path for YOUR actions.
    RayL
    24th Sep 2020
    8:30am
    David, sorry to hear the financial advice you got led to your significant loss. Like you I rely on our financial advisor which is the whole point of having one. My portfolio dropped marginally with the pandemic but nothing that won’t bounce back in the long term so I consider myself one of the lucky ones as many like you suffered significant losses. Hope things get better for you.
    skinner
    23rd Sep 2020
    8:54pm
    My wife, Jo, & I have a SMSF which has been doing well for the last decade & I estimate our expenses, mainly accounting/auditing fees at 0.6% for this year! I only started it because the fees were excessive, from my viewpoint! Glad I did!
    Ahjay
    24th Sep 2020
    8:20am
    Scott Pape, THE BAREFOOT INVESTOR advises that he uses Host Plus Industry Fund and invests in the Host Plus Indexed Balanced Fund with a management fee of 0.06% plus an Admin fee of $78.00 per year.
    Farside
    24th Sep 2020
    1:35pm
    for those asking for the list you can download the report and see for yourself at link given in the article.
    https://www.stockspot.com.au/fatcat/
    BillW41
    1st Oct 2020
    12:10pm
    David, I worked for ANZ for many years and had some success with both their staff and public super funds. I spread most funds around to CBA and NatMutual when I retired then ended up consolidating with OnePath which was fine until the GFC. My adviser was hopeless and I ended up losing $50,000 before taking personal control. Adviser has since retired.
    BillW41
    20th Oct 2020
    6:20pm
    I'm confused. This article rates AMP and OnePath as the two worst funds. IOOF is rated 5th best and now runs OnePath! Your other article on Retail Funds says AMP is 7th best and also states Colonial First State is No. 1, followed by BT, OnePath, MLC and AMP. None of this makes any sense....


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