‘My super fund isn’t a top performer, so should I switch funds?’

Sep 19, 2019
Should you jump ship if you notice your super underperforming? Jim Kilkenny gives his take on the hot topic. Source: Getty.

Q: My income stream is with an industry superannuation fund but that fund does not rate in the top six, according to Canstar’s ratings. I was very surprised that it wasn’t one of the stronger performers. Should I be swapping industry super funds or should I stay with my fund?

A: This is a good question but it very difficult one to answer in the absence of more information. The fact that your fund in a particular year does not rate well does not by itself necessitate a change in fund. It is more important to look at returns over a longer period (three to five years or longer) and make sure that you are comparing apples with apples.

For example, there is no point comparing a fund which invests principally in Australian shares with one that invests principally in cash or fixed interest because shares have the potential for higher risk but also higher returns. I’m also always cautious of using historical results as a basis of making future decisions.

If you have a question for Starts at 60’s money experts, email it to [email protected].

Starts at 60 has often written about how you can check your super fund’s returns against the competition to ensure you’re with a top-performing fund, but it’s important to remember that some of the advertised earning returns may not take into account fees and charges, so ensure you look at the net returns.

If you do find that your super fund has consistently performed less well than others, switching funds is relatively simple.

IMPORTANT LEGAL INFO This article is of a general nature and FYI only, because it doesn’t take into account your financial situation, objectives or needs. That means it’s not financial product advice and shouldn’t be relied upon as if it is. Before making a financial decision, you should work out if the info is appropriate for your situation and get independent, licensed financial services advice.

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Do you monitor the performance of your superannuation fund? Have you switched funds recently?

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