The only constant in superannuation at the moment seems to be change.
Following a number of years of strong returns from 2012 to 2015, we have seen volatility re-emerge over the past 12 months, with the return for the year to July 31, 2016 sitting at a more subdued 3.1%. This is well below the 10 year return of 5.7%pa for the median balanced option. As a result, people are having another look at their superannuation to see whether or not their fund is on track. To help identify some of the funds who have been performing well, we have compiled the top 10 performing balanced options for the year to July 31, 2016.
Over the past year, we have seen the benefit of alternative assets in the spotlight, as they have helped cushion funds against volatile equity markets. Despite the strength of the super funds above, we have seen a number of balanced options recording a negative return for the past year, illustrating the challenging conditions.
Industry vs. retail funds
When examining returns over the decade, it is pleasing to see there are some similar names for the top performers, as the long term remains key. All of the top ten balanced options for the past year were not-for-profit funds, continuing their strong history of performance. This trend continued over 10 years, with eight of the top ten performing funds being industry funds, with the remainder being corporate funds.
Indeed, the range of returns being experienced by members remains astounding. Over the decade, the range of returns for balanced options was 4%pa. This would equate to a 47.8% difference in your ending balance during this time, which would have a big impact on your retirement nest egg.
Given the current focus on income in retirement, subdued returns across most asset classes are presenting real challenges, particularly for those in or around retirement. Given the range of outcomes being experienced by members, make sure benchmarking your current provider is on your list of things to do.
Option Name1 Yr (%)Rank10 Yr (% pa)Rank
BUSSQ Premium Choice – Balanced Growth7.0%16.7%4
Catholic Super – Balanced6.4%26.7%5
UniSuper Accum (1) – Balanced6.1%36.7%2
MTAA Super – My AutoSuper5.9%43.6%40
Cbus – Growth (Cbus MySuper)5.9%56.6%7
HOSTPLUS – Balanced5.6%66.5%9
Rei Super – Balanced5.5%75.7%23
Energy Super – Balanced Option5.3%85.8%18
AMIST Super – Balanced **4.9%95.7%20
CareSuper – Balanced4.6%106.7%3
SR50 Balanced Index3.1%505.7%42
*SR50 Balanced Index Investment Options with between 60% and 76% of assets in growth style investments. All results are net of fees and tax. ** indicates the interim results.
Published in Money Magazine by Kirby Rappell (chartered financial analyst and research manager for SuperRatings); 31st August 2016