Investing, Reports

Best performing super funds in Australia

We compare the best performing super funds in Australia in 2020 – and the worst.

2020 is the eighth year Stockspot has researched Australia’s largest super funds for our annual Fat Cat Funds Report.

In this year’s research we compared 600 multi-asset investment options offered by Australia’s largest 100 super funds to find the best super funds – and the worst. The funds were assessed on how they performed, after fees, compared to other super options of similar risk over five years.

Download the report now, or keep reading to compare your super fund. 

  • Top performing super funds – Fit Cat Funds
  • Worst performing super funds – Fat Cat Funds
  • Best performing aggressive growth super funds
  • Best performing growth super funds
  • Best performing balanced super funds
  • Best performing moderate super funds
  • Industry vs retail super fund performance
  • How does Stockspot compare?
  • Best super funds 2020

    2020 Gold Fit Cat Fund Award – Unisuper

    In 2020, Unisuper took out the Gold Fit Cat Fund award for the most top performing funds over five years. UniSuper manages over $80b of Australian’s superannuation investments, and after taking out the Silver spot last year, takes out the top prize with seven Fit Cat Funds. 

    UniSuper Fit Cat Fund Options
    Unisuper – Sustainable High Growth
    Unisuper – High Growth
    Unisuper – Growth
    Unisuper – Sustainable Balanced
    Unisuper – Balanced
    Unisuper – Conservative Balanced
    Unisuper – Conservative

    2020 Silver Fit Cat Fund Award – IOOF

    The Silver award goes to IOOF with five Fit Cat Funds.

    IOOF Fit Cat Fund Options 
    IOOF – MultiMix Growth
    IOOF – MultiMix Balanced Growth
    IOOF – MultiMix Moderate
    IOOF – MultiMix Conservative
    IOOF – MultiMix Capital Stable

    2020 Bronze Fit Cat Fund Award – Australian Super

    The Bronze award goes to Australia’s largest superannuation fund, Australian Super, who manage more than $160 billion for over two million members. Australian Super had four Fit Cat Funds and takes out this award for the second year in a row. 

    Australian Super
    Australian Super – High Growth
    Australian Super – Balanced
    Australian Super – Conservative Balanced
    Australian Super – Stable

    What did the top three super funds have in common? Low fees! 

    Despite having different investment strategies, the one factor these three  funds all had in common was investment fees of well under 1%, with an average fee of 0.71%

    Congratulations to our three Fit Cat Fund winners for 2020. Don’t forget to check on their performance in our Fat Cat Funds Report next year.

    Worst super funds 2020

    Last place: AMP

    AMP has topped our list for the most Fat Cat Funds, and has been in the Fat Cat Fund category for eight years in a row. AMP’s share price has fallen by almost 70% since we published the first Fat Cat Funds Report in 2013 and billions has been withdrawn from underperforming AMP products.

    AMP has also made history by being the first Fat Cat Fund to deliver a negative return over 5 years with one of their options delivering a total return of -10.5%. 

    Watch our AMP Fat Cat Fund video produced in partnership with The Chaser back in 2016

    AMP
    Flexible Lifetime Super (FLS) – AMP Capital Premium Growth
    Flexible Lifetime Super (FLS) – AMP Capital Multi-Asset
    Flexible Lifetime Super (FLS) –  BlackRock Global Allocation
    North – North Professional Alternative Balanced
    Flexible Lifetime Super (FLS) – AMP Capital Dynamic Markets
    Flexible Lifetime Super (FLS) – ipac Income Generator
    Flexible Lifetime Super (FLS) – Professional Moderately Conservative
    Flexible Lifetime Super (FLS) – Schroder Real Return
    Flexible Lifetime Super (FLS) – AMP Capital Ethical Leaders Conservative Fund
    Flexible Lifetime Super (FLS) – Future Directions Conservative
    Flexible Lifetime Super (FLS) – Professional Conservative
    Flexible Lifetime Super (FLS) – AMP Conservative

    Second last place: OnePath

    OnePath came in 2nd place, with 11 Fat Cat Funds. For eight years we have pressured OnePath to respond by reducing the fees in these funds or move clients to better performing options. 

    Now under a Fit Cat Fund ownership, in IOOF, we can only hope they look to lower its fees and improve their performance.

    OnePath
    OnePath Masterfund – OnePath Select Leaders 
    OnePath Masterfund – OptiMix Balanced 
    OnePath Masterfund – OnePath Active Growth 
    OnePath Masterfund – OptiMix Growth 
    OnePath Masterfund – OnePath Managed Growth 
    OnePath Masterfund – OptiMix High Growth 
    OnePath Masterfund – OnePath High Growth 
    OnePath Masterfund – OnePath Tax Effective Income 
    OnePath Masterfund – OptiMix Moderate 
    OnePath Masterfund – OptiMix Conservative 
    OnePath Masterfund – OnePath Balanced 
    OnePath Masterfund – OnePath Diversified Credit
    OnePath Masterfund – OnePath Capital Stable 

    Third last place: Macquarie

    Macquarie takes the award for third last-place thanks to their complex product suite, high fees and poor performing investment options. 

    Macquarie
    Macquarie Superannuation Plan – ING Managed Growth
    Macquarie Superannuation Plan – BT W Balanced Returns
    Macquarie Superannuation Plan – Aberdeen MA Real Return
    Macquarie Superannuation Plan – BT WS Conservative
    Macquarie Superannuation Plan – UBS Defensive

    Want to compare your super even further? Read the full 2020 Fat Cats Fund Report here. 

    Comparison of different super fund categories

    Super funds that were analysed by Stockspot go by many names: balanced, diversified, moderately conservative, moderate and capital stable. 

    Investors need to be careful to understand the asset mix of their fund, not rely on how it has been named.

    Find out more about how to choose the right super fund.

    Best and worst performing aggressive growth super funds

    TOP 10 (FIT CAT FUNDS)5 YEAR RETURN (P.A.)BOTTOM 10 (FAT CAT FUNDS)5 YEAR RETURN (P.A.)
    1Prime Super – Alternatives9.0%AMP – FLS – Capital Premium Growth0.6%
    2Unisuper – Sustainable High Growth9.0%OnePath – OnePath Select Leaders 1.4%
    3Unisuper – High Growth8.7%OnePath – OptiMix Balanced 2.3%
    4.HOSTPLUS – Shares Plus8.0%OnePath – OnePath Active Growth 2.4%
    5CBUS – High Growth8.0%OnePath – OptiMix Growth 2.6%
    6Australian Super – High Growth7.7%OnePath – OnePath Managed Growth 2.6%
    7Unisuper – Growth7.7%OnePath – OptiMix High Growth 2.9%
    8Equipsuper – Growth Plus7.6%Zurich – Zurich Managed Growth (NEF)3.1%
    9Club Plus – High Growth7.6%Macquarie – ING Managed Growth3.3%
    10IOOF – MultiMix Growth7.5%OnePath – OnePath High Growth 3.4%

    Aggressive growth super funds are funds with at least 80% in growth assets like shares and property and generally targeted at investors with a very long investment horizon given that they can be very volatile over the short term.  

    The top performing growth funds had very little in defensive assets such as bonds and cash. This helped them achieve returns of 7-9% p.a. over five years, as growth assets have enjoyed strong returns in recent years despite the COVID-19 fall. 

    However, the equivalent Vanguard index fund still beat 78% of high growth funds over the past five years.

    Compare aggressive growth super funds with index funds (ie. Vanguard)

    COMPARATIVE INDEX%
    Vanguard High Growth Fund after investment fees and accumulation super taxes (No Stockspot comparison available)6.7%
    % of aggressive growth super funds that were beaten by Vanguard78%

    The bottom funds in this category typically had more cash and bonds, poor outperforming activate managers, and higher fees. The average fee in this category was 2.8% which dragged performance down to 0.6-3.4% p.a.

    AVERAGE FEE (P.A.)AVERAGE 5 YEAR RETURN (P.A.)
    Top 101.0%8.1%
    Bottom 102.8%2.5%

    OnePath featured heavily in the Fat Cat Fund list with seven of the worst 10 performing funds. Meanwhile we saw industry funds (e.g. UniSuper and AustralianSuper) take out the top 10 performing super funds.

    Best and worst performing growth super funds

    TOP 10 (FIT CAT FUNDS)5 YEAR RETURN (P.A.)BOTTOM 10 (FAT CAT FUNDS)5 YEAR RETURN (P.A.)
    1. HESTA – Eco Pool8.6%AMP – FLS – AMP Capital Multi-Asset1.2%
    2.Unisuper – Sustainable Balanced7.5%OnePath – OnePath Tax Effective Income 1.3%
    3.Australian Super – Balanced7.4%OnePath – OptiMix Moderate 2.0%
    4.Macquarie – Macquarie OneChoice7.3%Zurich – Zurich Balanced (NEF)2.5%
    5.Unisuper – Balanced7.3%AMP – FLS – BlackRock Global Allocation2.6%
    6.AON – smartMonday MySuper – Age 457.0%Macquarie – BT Balanced Returns2.9%
    7.IOOF – MultiMix Balanced Growth6.8%TAL – Tal Performance2.9%
    8.Fiducian – Balanced Fund6.6%AMP – North Professional Alternative Balanced3.2%
    9.Future Super – Balanced Impact6.6%Perpetual WealthFocus – Diversified Growth3.3%
    10.QSuper – Lifestime Aspire 16.5%AMP – FLS – Responsible Investment Leaders Balanced3.6%

    Growth super funds have 60-80% in growth assets like shares and property and generally targeted at investors with a long investment horizon given that they can be quite volatile over the short term.  

    Industry funds such as HESTA, UniSuper and Australian Super were in the top 10 growth super funds. 

    The top performing funds in this group had a relatively small (27%) allocation to bonds and cash. This allowed them to return 6-8% p.a. over five years, with the higher allocation to growth investments helping them to enjoy a strong few years of returns. However, a simple index fund still beat 80% of all growth funds over the past five years.

    COMPARATIVE INDEX%
    Average growth super fund return 5.1%
    Stockspot return after investment fees and accumulation super taxes7.1%
    Growth super funds that were beaten by Stockspot97%

    Retail super funds such as AMP, OnePath and Zurich performed the worst out of growth super funds.  The bottom funds in this group typically had a higher (33%) allocation to cash and bonds and high fees of 2.1% on average. This pulled down their performance to 1-3% p.a.

    AVERAGE FEE (P.A.)AVERAGE 5 YEAR RETURN (P.A.)
    Top 10 growth super funds 1.1%7.2%
    Bottom 10 growth super funds 2.1%2.5%

    Best and worst performing balanced super funds

    TOP 10 (FIT CAT FUNDS)5 YEAR RETURN (P.A.)BOTTOM 10 (FAT CAT FUNDS)5 YEAR RETURN (P.A.)
    1. WA Local Government – Sustainable Future6.9%AMP – FLS – AMP Capital Dynamic Markets-2.2%
    2.Australian Super – Conservative Balanced6.2%OnePath – OptiMix Conservative 1.7%
    3.IOOF – MultiMix Moderate5.7%Zurich – Zurich Capital Stable (NEF)1.9%
    4.Public Sector Super – PSSap Income Focused5.7%OnePath – OnePath Balanced 2.2%
    5.QSuper – Lifetime Focus 25.6%MLC – Inflation Plus Portfolios – Moderate Portfolio2.4%
    6.ClearView – IPS Enhanced Index 505.6%Macquarie – Aberdeen MA Real Retrn2.6%
    7.Unisuper – Conservative Balanced5.6%AMP – FLS – ipac Income Generator2.7%
    8.AMG Super – AMG Balanced5.3%AMP – FLS – Professional Moderately Conservative3.0%
    9.HESTA – Conservative Pool5.3%Perpetual – Diversified3.1%
    10.MyLifeMyMoney – Moderately Conservative5.3%AMP – FLS – Future Directions Moderately Conservative3.1%

    Balanced super funds are funds with 40-60% in growth assets like shares and property and generally targeted at investors with a medium to long investment horizon.  

    The top performers in this group had a 46% allocation to fixed income and cash. This helped them achieve returns of 5-7% p.a. over five years. However, a simple index fund beat an extraordinary nine of every 10 balanced funds over the past five years.

    COMPARATIVE INDEX%
    Average balanced super fund return 4.1%
    Stockspot return after investment fees and accumulation super taxes6.6%
    Balanced super funds that were beaten by Stockspot99%
    AVERAGE FEE (P.A.)AVERAGE 5 YEAR RETURN (P.A.)
    Top 10 balanced super funds 0.8%5.7%
    Bottom 10 balanced super funds 2.0%2.0%

    Best and worst performing moderate super funds

    TOP 10 (FIT CAT FUNDS)5 YR RETURN (P.A.)BOTTOM 10 (FAT CAT FUNDS)5 YR RETURN (P.A.)
    1. Macquarie – Macquarie Life Capital Stable5.8%AMP – FLS – Schroder Real Return1.7%
    2.Australian Super – Stable5.3%Macquarie – BT Conservative1.8%
    3.IOOF – MultiMix Conservative4.8%MLC – Inflation Plus Portfolios – Conservative1.8%
    4.Prime Super – Conservative4.8%TAL – TAL Capital Protected1.9%
    5.Unisuper – Conservative4.6%Macquarie – UBS Defensive1.9%
    6.Bendigo – Conservative Index4.5%AMP – FLS – AMP Capital Ethical Leaders Conservative Fund2.1%
    7.Media Super – Stable4.5%AMP – FLS – Future Directions Conservative2.2%
    8.ClearView – IPS Enhanced Index 304.5%AMP – FLS – Professional Conservative2.3%
    9.Fiducian – Fiducian Capital Stable Fund4.5%AMP – FLS – AMP Conservative2.5%
    10.IOOF – MultiMix Capital Stable4.5%MLC – Horizon 2 Capital Stable Portfolio2.7%

    Moderate super funds are funds with 20-40% in growth assets like shares and property and generally targeted at investors with a short to medium investment horizon given that they can are relatively stable over the short term.

    Industry and public sector funds made up 5 of the 10 Fit Cat Funds.

    The top performing funds in this group had a 67% allocation to bonds and cash. This helped them achieve returns of 4-6% p.a. over five ye

    The bottom performing funds in this group typically had a slightly higher allocation to cash and bonds as well as higher fees. This reduced their performance to 2-3% p.a, mainly for the retail funds such as AMP, Macquarie, and MLC. 

    The more conservative the portfolio, the harder it is to beat an index fund portfolio. See the table below as an example.

    COMPARATIVE INDEX%
    Average moderate super fund return3.5%
    Stockspot return after investment fees and accumulation super taxes6.2%
    Moderate super funds that were beaten by Stockspot100%

    Due to the lower returns from moderate super funds, older Australians and pensioners in lower risk super strategies need to be even more sensitive to fees. 

    Compare the fees of the best performing moderate super funds with the worst performing:

    AVERAGE FEE (P.A.)AVERAGE 5 YEAR RETURN (P.A.)
    Top 100.9%4.8%
    Bottom 101.6%2.1%

    Industry vs retail super fund performance

    Industry funds (and public sector funds) continue to do better than retail funds. The reason for this is due to:

    • Lower fees – industry funds have 30% lower fees than the average retail fund. Not having a profit motive means they are not profit driven, but that doesn’t mean that they are all “low cost”. 
    • Asset allocation – industry funds tend to have a higher allocation to unlisted assets such as property, infrastructure and private equity which have enjoyed strong recent returns.

    Large retail funds from AMP and OnePath dominated the Fat Cat Funds with all bottom 10 funds being a retail fund. The common theme is these funds charge higher than average fees.

    The bottom performing funds in this group typically also had a 46%  allocation to cash and bonds and higher fees. 

    AMP has also made history by being the first Fat Cat Fund to deliver a negative return over 5 years with their AMP Capital Dynamic Markets investment option delivering a total return of -10.5%. This proves that active fund managers trying to time the market find it very tough, where a simple and passive Stockspot balanced portfolio returned 38% in total over the same 5 year period. 

    Superannuation Comparison: Our Analysis 

    Many superannuation funds don’t index 

    Both Stockspot and the Vanguard Index Fund options have beaten the average Industry fund and approximately 90% of funds in total after fees and taxes. This is largely due to the compounding effect of lower fees.

    Additionally, superannuation managers can easily access low cost index funds, yet many choose not to. We believe this is because there are still huge conflicts of interest in the industry.

    Super funds would rather pay themselves – their big teams of fund managers, analysts and asset consultants – despite the evidence that they do not add any value to super fund investment returns.

    Bigger super funds don’t perform better 

    We’ve found that that super funds members don’t always enjoy benefits by joining larger funds. In many cases there are added costs as funds grow which lead to higher per-member fees. This is because of the cost of legacy administration systems and active investing.

    There are more large funds who are Fat Cat Funds and they are usually between $20 billion and $100 billion in size. The best performing funds tend to either be between $5 and $10 billion or over $100 billion in size.

    We expect more consolidation and merging in the industry, having already seen the likes of Media Super merging with CBUS, and First State, WA Super and VicSuper merging to create a $130b fund in September 2020, and more recently NGS Super agreeing to merge with Australian Catholic Super (ACS). Find out how to choose the right super fund here.

    Compare your superannuation fund Stockspot investing

    AVERAGE SUPER FUND 5 YEAR RETURN (P.A.)STOCKSPOT 5 YEAR RETURN AFTER FEES AND TAXES (P.A)STOCKSPOT PERFORMANCE
    Growth5.1%7.1% (Topaz)Top 3%
    Balanced4.1%6.7% (Emerald)
    6.6% (Turquoise)
    Top 1%
    Top 1%
    Moderate3.5%6.2% (Sapphire)
    6.1% (Amethyst)
    #1
    #2

    If you aren’t happy with your superannuation fund, you have a few options. 

    You can switch your super fund because there are some super funds who offer indexed super options with low fees and consistent performance.

    If you’re ready to invest outside of your superannuation, low cost indexing continues to be the best way for Australians to get consistent returns.

    Millions of working Australians in default super funds would benefit greatly if all their super money went into a low-cost index fund, rather than paying the large salaries of people in the funds management industry.

    Stockspot for SMSFs – get the most of out of your super

    Stockspot is available to SMSFs who may want to get the most out of their retirement fund. 

    While Stockspot is only available to SMSFs, many super funds offer similar indexed super options with low fees and consistent performance.

    Stockspot’s indexed investment portfolios ranked in the top 3% of all super options in Australia after accounting for investment fees and accumulation stage super taxes.

    The lower risk (moderate) Stockspot portfolios we offer beat all similar super funds in Australia. 

    Find out more here.

    Find out how Stockspot makes it easy to grow your wealth and invest in your future.


Investment Associate

Marc has previously worked for Morgan Stanley, AMP and KPMG. He holds a Bachelor of Business (Finance/Accounting) from the University of Technology Sydney (UTS), and has completed his Chartered Financial Analyst (CFA) Level 1.

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