Stockspot reveals best and worst super funds in Australia
ANZ and AMP named as worst super fund providers in Australia for their high fees and poor returns.
ANZ and AMP named as worst super fund providers in Australia for their high fees and poor returns.Now in its seventh year, Stockspot's annual Fat Cat Funds Report has looked at more than 600 super products in the market to reveal which funds are the biggest "Fat Cats". A Fat Cat Fund is one that charges high fees and delivers poor returns. In comparison, a Fit Cat Fund has minimal fees and better performance.
Fat Cat Super Funds on average charge 2% a year in fees, while in comparison Fit Cat Super Funds charge less than 1% a year in fees. Because of the correlation between the amount you pay in fees and the returns you get back, Stockspot found that Fit Cat Funds returned 20% more than Fat Cat funds over the past five years.
Fees are an important factor to consider when selecting a super fund because they eat into your returns. In fact, Stockspot's analysis found that Australians in Fat Cat Funds could end up over $200,000 worse off at retirement compared to people with their super in a Fit Cat Fund. Basically, you want to have your super in a Fit Cat Fund.
Which are the best and worst super funds?
Of the worst 40 Fat Cat Funds, more than half were offered by ANZ/OnePath and AMP which led to both providers sharing the Gold medal for the fattest Fat Cat Funds. ANZ has now topped the list of the worst Fat Cat Funds for the seventh time running. Also among the worst Fat Cat Funds were super investment options offered by MLC, Perpetual and Zurich.
In comparison QSuper, UniSuper and Australian Super all topped the list for the fittest Fit Cat Funds (that is, these providers offered the most funds with the lowest fees and best performance).
Looking at the individual fund investment options, here's the top to Fit Cat Funds in the growth funds category (most Australians have their super in a growth fund).
| Top 10 growth funds (Fit Cat Funds) | 5 year return p.a. |
|---|---|
| HESTA Eco Pool | 10.8% |
| QSuper Aggressive | 9.7% |
| QSuper Lifetime Aspire 1 | 9.5% |
| AustralianSuper Balanced | 9.5% |
| QSuper Lifetime Outlook | 9.4% |
| UniSuper Balanced | 9.4% |
| MTAA Super Balanced | 9.0% |
| UniSuper Sustainable Balanced | 8.9% |
| QSuper Balanced | 8.8% |
| Statewide Super Active Balanced | 8.7% |
CEO of Stockspot Chris Brycki said the one thing the top three Fit Cat Funds had in common was they all charged less than 1% in fees annually.
"One of our golden rules of superannuation is; the less you pay, the more you get. Always pay less than 1% p.a. in fees so your super isn't eroded by high fees. I know 1% doesn't sound like a lot, but for the Aussies stuck in these Fat Cat Funds they'll be worse off by $200,000 or more compared to their friends who are in a low-fee fund," he said.
If you're paying too much for your super fund, compare super funds and switch to one with lower annual fees.
