Top 10 performing super funds for 2012/2013 year, and for past 10 years

Good news for Australian fund members, and for Australian super funds! The investment performance results for the 2012/2013 financial year are the best returns in 16 years, according to rating company Chant West.

The median return for a growth investment option within a superannuation fund was 15.6% for the 2012/2013 year, with investment returns ranging from a low of 10.2% (that is still a double-digit return) to a high of 18.6%, according to figures released by Chant West.

The Top 10 performing super funds for the 2012/2013 year are listed in the table below.

Even so, at 30 June 2013, the median growth super fund is only sitting 10.5% above its pre-GFC highs after 5 years, but at least all of the pre-GFC losses have been recouped for members of large super funds. For more information about the investment performance specifics of the 2012/2013 year, see LearnerInvestor article Asset classes: Naming the investment winners for the 2013 financial year.

The performance data is based on Chant West figures, and the table ranking is based on individual investment options offered by a superannuation fund, and the investment options involved in the ranking process look after assets worth more than $500 million.

Note: Based on Chant West’s rankings, a growth fund typically holds between 61% and 80% in growth assets such as shares and property. Some super funds may describe this type of asset allocation as a ‘balanced’ investment option, and this type of investment option is the typical default investment option for super funds (where you don’t actively choose your investment options for your super account). At least 80% of all super fund members have their superannuation money invested via a growth or balanced investment option.

If you don’t actively choose your investment options for your super account, then your retirement savings will be invested in the default investment option. If you do actively choose your investment option/s then your super savings may be invested in another type of investment option such as conservative or high growth.

Top 10 performing super funds for 12 months to 30 June 2013

The top 10 performing growth super funds for the 2012/2013 year consist of seven retail master trusts, two industry funds, and one corporate super fund.

Top 10 Performing Growth Funds for 1 year to June 2013 (%)

Rank

Super fund and investment option 1 year return*

1

BT Super For Life 1960s Lifestage

18.6%

2

REST Core

18.4%

3

Aon Balanced

17.9%

4

AMP RIL Balanced

17.8%

5

CFS FirstChoice Growth

17.8%

6

Russell Balanced

17.4%

7

AXA Super Directions Balanced

17.3%

8

Telstra Super Balanced

16.9%

9

IOOF MultiMix Balanced Growth^

16.8%

10

HOSTPLUS Balanced^

16.6%

Source: Chant West, 22 July 2013 media release (www.chantwest.com.au)

^Investment returns for these 2 super fund investment options are interim.

*Performance is net of investment fees and taxes. It does not include administration fees or adviser commissions.

Top 10 performing super funds over 10 years – industry funds win

A great investment performance for one year does not create a healthy retirement balance. What then does this mean for anyone considering whether the super fund they have is the best-performing super fund over the long term?

Industry super funds dominate in Chant West’s table for the top 10 performing super funds over 10 years, although two corporate fund investment options feature high up in the list – Commonwealth Bank Group Super Mix 70 and Telstra Super Balanced – with an average annual return over 10 years of 8.0%, and 7.8% respectively. See table below for the top 10 super funds over the past decade.

Note: A poor investment performance for one year doesn’t condemn you to a struggle-street retirement, and likewise a great investment performance for one year does not create a worry-free retirement balance many years down the track. What then does a double-digit return for the 2013 financial year mean for anyone considering whether the super fund they have is the best-performing super fund over the long term?

Way back in 2010, Warren Chant, principal of rating company Chant West, gave some practical advice for super fund members. He said: “From the member’s point of view, I think the message – now more than ever – is to keep an eye on your fund’s performance regularly, and at least every year. Don’t be too concerned if it underperforms in the short term, but if it consistently underperforms over a few years, try to find out why and maybe look at some alternatives.”

Chant West explains that the typical return objective for a growth fund is to beat inflation by 3% to 4% (after investment fees and taxes) over rolling 5-year periods which currently translates to returns of 6% to 7% each year. Super funds also have a risk objective which is to post a negative return no more than once in every 5 years, on average.

Upon the release of the 2013 financial year results, Chant’s advice was: “To judge whether funds are meeting their long-term objectives, you really need to look back as far as you can, and certainly well past the GFC. We now have reliable data for all the major funds going back 21 years to July 1992… and… we see that funds have achieved those objectives. The annualized return over that period [21 years] is 7.5%, the annual CPI [inflation] increase is 2.6%, so the real return above inflation has averaged 4.9%.

“As for the risk objective, there were three negative years out of the past 21 which averages out to one in 7, so that target was met.”

The top 10 performing growth super funds for 10 years to 30 June 2013 consist of eight industry funds and two corporate super funds.

Top 10 Performing Growth Funds* for 10 years to 30 June 2013 (%)
Super fund and investment option 10 years (% each year)
1. REST Core 8.0%
2. CBA Group Super Mix 70 8.0%
3. QSuper Balanced 7.8%
4. ESSS Growth 7.8%
5. Telstra Super Balanced 7.8%
6. BUSS (Q) Balanced Growth 7.7%
7. CareSuper Balanced 7.7%
8. AustralianSuper Balanced 7.6%
9. Catholic Super Balanced* 7.6%
10. Cbus Growth* 7.6%

Source: Chant West, 22 July 2013 media release (www.chantwest.com.au)

^Investment returns for these 2 super fund investment options are interim.

*Performance is net of investment fees and taxes. It does not include administration fees or adviser commissions. The performance data is based on Chant West figures, and the table ranking is based on individual investment options offered by a superannuation fund, and the investment options involved in the ranking process look after assets worth more than $500 million.

This article originally appeared on SuperGuide.com.au – Simple independent superannuation information. Reproduced with permission.


About Trish Power

Trish Power has written 25 articles on Learner Investor.

Trish Power is a long-time share and property investor. She is an author and journalist, who holds degrees in law and economics from the University of Melbourne and an advanced diploma in Professional Writing and Editing from RMIT University. She is the co-author of baby boomer investment bible, You Don’t Have to be Rich to be Wealthy (Wrightbooks), author of Superannuation For Dummies, 2nd Edition (Wiley), DIY Super For Dummies, 2nd edition (Wiley) and Super Freedom: Create a worry-free financial future in 6 steps (Wrightbooks). Trish is also the founder of independent superannuation site SuperGuide.com.au. Trish describes much of her financial writing as educative journalism. She is passionately committed to raising the level of financial literacy in Australia and empowering individuals to improve their financial circumstances.

© Copyright Trish Power 2014 (unless otherwise specified)

Copyright for this article belongs to Trish Power, and cannot be reproduced without express and specific consent.

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