If 2017 is the year to get into a better super fund, then here’s some of the top performing ones worth checking out.
Overall most super funds had a pretty positive 2016 with the median growth fund returning 7.7 per cent, and every fund in the growth category delivered a positive result, according to super fund research house Chant West.
Most Australian’s are invested in growth funds. These are funds that are made up of between 60 per cent and 80 per cent riskier assets such as shares.
When the going is good for shares, these funds are likely to produce better returns than say conservative cash or lower risk funds.
The top performing funds growth funds with $1 billion or more in assets under management were Catholic Super and HOSTPLUS. Both tied for top spot and achieved a 10.1 per cent return over, says a Chant West survey.
Next with a 9.6 per cent and 9.4 per cent return were Cbus Growth (Cbus MySuper) and CareSuper Balanced respectively.
A balanced fund is where the mix of assets are made up of between 50/50 per cent risky, modest and low growth assets.
Sunsuper Balanced, Energy Super Balanced, Statewide Super MySuper, HESTA Core Pool, BUSS (Q) Balanced Growth and AustralianSuper Balanced all achieved 8+ per cent returns.
Super funds have had a very good run since the end of the financial crisis and have experienced only one negative year of going backwards.
The better performing funds were generally those that had higher allocations to Australian shares, Australian listed property, unlisted property and infrastructure, according to Chant West director Warren Chant.
“Three of the key stories in 2016 were the shock ‘Brexit’ vote, the equally surprising Donald Trump election victory and the timing of the second US interest rate hike,” says Mr Chant.
“All of these created uncertainty, but share markets again proved how resilient they can be.
“Investors chose to focus on the gradual improvement in the US economy and what that might mean for global growth, and as a result international shares returned 8.9 per cent in hedged terms and 7.9 per cent unhedged.
“Australian shares did even better, returning a healthy 11.8 per cent.”
Over the past 24.5 years since the introduction of compulsory super in Australia, growth funds have returned 8.2 per cent per annum on average, outperforming inflation by 5.7 per cent per annum.
Industry funds outperformed retail funds over the year, returning 8.2 per cent versus 6.9 per cent, says Chant West.
Financy tips for changing super funds in 2017
- Do you research on which funds have had strong and solid returns over the past three to five years
- Do your returns on the cost of fees in each fund. You need to know the cost of investment management and admin fees
- Know your balance in your fund that you wish to roll over
- Know if you are paying for insurance. What type of insurance and do you want to keep it?
- Find out if you have any lost super funds while you are at it
- Organise the paper work out of the old fund and into the new.
- Be patient and be prepared to do paper work – super funds still have a way to go to make this process streamlined for everyone!