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Superannuation

Opinion: How to Find the Best / Highest-Performing Super Funds

I understand that shopping for a super fund is not a short-term decision and the funds that are performing well today aren’t always going to be the best long-term performers. Still, one question remains: how can I find the best performing super funds today?

There are 100s of Super Funds to choose from and even more investment options

Every Australian employee has the choice of which super fund receives super contributions for their retirement. When starting a new job, employees will fill provide the account details of the super fund they wish to nominate, or they can opt for the employer’s default super fund.

- The Small Business Owner (early 60s)

Key factors to consider when looking for a super fund

Things like strong historical performance, low fees and a wide variety of investment options are the main things. It’s also convenient to have insurance options within the super fund and the ability to quickly roll your super into or out of the fund if you wish.

- The Accountant (semi-retired)

Average super fund returns aren't always a bad thing

Taking the reigns on your super fund also means you have to consider and manage your expectations regarding investment returns. As the old saying goes, higher risk, higher reward and different types of investment options within your super fund should mean different expectations about investment returns.

- The Marketing Executive (mid-30s)

Growth investment options = higher potential returns (or potential losses)

Growth investment options, also known as an aggressive investment options, carry the highest potential returns. Still, risk-taking is a double-edged sword and different categories of growth investment options, carry different risks. To best illustrate, the returns of high-growth or aggressive investment options will exhibit more volatility than a balanced or default investment option that holds a variety of assets like bonds and fixed income products, which typically are not as volatile.

- The Thrill-seeker (late-20s)

Defensive super funds = lower potential returns (but lower risk historically)

As the name suggests, defensive investment options invest in a range of fixed-income investments and historically have provided a more steady investment return than growth funds. As you would expect for taking less risk, the potential investment returns are a bit lower. Defensive investment options typically buy bonds (government or corporate) for a set interest rate and payment period. While trying to predict stock market returns is challenging at the best of times, bonds have historically been a safer investment as governments and good quality companies are usually ones to keep their word and pay back the debt they borrow.

- The Accountant (semi-retired)

Focus on what’s important to you

Hunting the super fund with the best short term performance is easy to do, but long term performance is key when you are investing your retirement savings. Super funds are long term investments, and you should be analysing returns on a 5-year time horizon at the very least. Jumping from super fund to super fund based recent performance is like looking in the rear-view mirror, and it usually does not leads to big gains. Transaction costs from changing your investment strategy often are likely to wipe out any long-term profits.

- The Marketing Executive (mid-30s)

General Advice Warning

Kind words from Aussies managing
their own self funded futures

  • SMSF Mate is a unique website because it has ideas about how to approach SMSFs, insurance and other financial topics that come straight from first hand experience. It's much more useful than what you find on all the other financial websites that just offer generic info that you could easily get on the ATO's website. It's also nice to know there's no financial incentive behind the information, it's legitimately there to help people understand self-managed super funds and how to get the most out of them, not to get an affiliate commission from a broker or other financial services provider. The investment product information is also incredibly useful, I've never seen this kind of functionality on any other website that let's you look at such a wide range of products, sort by what info is most interesting or important to you, and subscribe to updates for different funds and financial products all in one place. Definitely worth checking out if you own or are considering an SMSF!

    David G, Self-Employed, SMSF Owner
  • SMSF Mate provides a unique insight into superannuation and financial topics in a way that is easier to understand than conventional websites. The colloquial nature of the site makes it easy to understand and they often speak about complicated topics in lamens terms so I can wrap my head around them. The investment product information is a great way to research funds that I am interested in investing in with my SMSF and there is a lot of helpful information on the site for better structuring my investment portfolio. In comparison to other websites which offer similar information, SMSF Mate excels as the information is free to access whereas many other sites charge a subscription fee for the same thing. Overall, I think SMSF Mate is a great resource for SMSF trustees and is worth looking at for a variety of super-related topics. Thanks.

    Tim B, Business Owner, SMSF Trustee