At the risk of stating the bleeding obvious, your superannuation fund’s investment performance matters
So why state it? Because Productivity Commission research released in May found that millions of Aussies have their retirement nest egg languishing in the 25 percent of funds that consistently underperform their peers, with fees and insurance premiums further eating away the sub-par returns achieved by the funds’ investment managers. The members of such funds see their retirement incomes reduced by as much as 40 percent as a result, the commission found.
With such a high personal price to pay for sticking with an underperformer, why don’t more people dump their dismal fund, then? Because, the commission says, its just too confusing, with too many super product options (40,000 and counting) and information that workers just don’t understand.
And yet, checking whether your savings are in one of these underperforming funds is relatively simple.
Every super fund issues its members with an annual statement that sets out their balance, a summary of the fund’s benefits (such as insurances) and the investment return achieved by the fund over a 12-month period. You can compare the results on your statement with the returns achieved by other funds by looking at a comparison site such as Canstar, or by checking individual funds’ returns that are published on their websites.
There are also two well-known super research consultancies – Chant West and SuperRatings – that publish regular updates on super fund performance, as well as issuing broader ratings that take into account funds; fees and benefits as well as investment returns.
When considering fund investment performance, however, there are a few things to keep in mind:
Important information: The information provided on this website is of a general nature and for information purposes only. It does not take into account your objectives, financial situation or needs. It is not financial product advice and must not be relied upon as such. Before making any financial decision you should determine whether the information is appropriate in terms of your particular circumstances and seek advice from an independent licensed financial services professional.