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Industry super repeatedly outshines retail funds

Peter Terlato 23 January 2017

superannuation calculator money returns

After a shaky start, super funds showed resilience in 2016.

The latest independent superannuation performance figures show that industry funds yielded significantly greater returns than retail bank funds in 2016.

SuperRatings data reveals industry super funds outperformed retail funds by an average 2.74% last year.

The statistics also re-affirm the durability of industry funds, which have outperformed their retail counterparts by 2.07% over three years; 2.16% over five years and 2.18% over the last decade.

Similarly, research and consultancy firm Chant West released super performance figures, confirming the long-term returns advantage held by industry funds over retail funds.

Chant West's stats show that industry funds returned 8.2% in 2016, compared with 6.9% for retail funds, while over the last ten years, industry funds delivered 5.5% per annum against retail funds' 4.6% per annum.

1-year returns3-year returns5-year returns7-year returns10-year returns
Industry super funds8.2%7.8%10.5%8.1%5.5%
Retail super funds6.9%6.8%10.0%7.3%4.6%

The data also found not-for-profit funds made up the entirety of Chant West's top 10 growth options.

SuperRatings chairman Jeff Bresnahan said despite a shaky start, superannuation funds delivered convincing returns through the first half of 2016. Funds struggled through the three months to October as shares gradually sold off, but bounced back with a late surge in November and December.

"There will be no shortage of political events in 2017, and based on last years' experience we can expect continued bouts of heightened volatility. However, like 2016, we may be surprised at the resilience of super funds and their ability to perform in a range of market conditions," he said.

Recent changes to Australia's superannuation and pension regulations has led to a substantial rise in the average age of intending retirees, which may have a flow-on affect for youth unemployment.

In addition, a report released last month suggests average insurance premiums through superannuation are too high for some Aussie workers, slashing hundreds of thousands of dollars off retirement balances.

If you're looking to switch funds, consolidate your super, better manage your self-employed savings or take out income protection for your nest egg, it's best to compare options and make the right decision.

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