How should you compare super funds?
Look for the following 6 features when comparing to find the best super fund.
The lower the fees the better, as higher fees will eat into your investment returns. A general rule of thumb is to make sure the fees are less than 1% of the value of your super balance per year (so for a $50,000 balance, annual fees around $500 or less are relatively low).
High long-term performance
Look at the 5- and 10-year performance returns instead of only looking at the past year's performance. Super is a long-term investment, so you want a fund that has consistent, strong performance over the long term rather than a one-off good year.
An investment strategy that suits your age
Generally, you should invest in more high-risk growth assets (like shares) while you're young because you have plenty of time to ride out any short-term market falls. If you're young and want to take on more risk, compare high-growth investment options.
An investment strategy you agree with
Some funds offer life stage investment options, meaning they'll adjust your investments for you as you get older so you're not taking on too much risk. Others will offer pre-mixed options based on certain risk levels and regardless of age, e.g. balanced, conservative or high growth. Think about which option works best for you before comparing.
An investment approach that aligns with your values
According to Finder data, 43% of Australians are interested in their super being invested ethically. If you're passionate about investing ethically and want to exclude certain industries such as fossil fuels or tobacco, choose a fund that offers a sustainable or ethical investment option.
Suitable insurance cover.
Most funds will offer a default level of cover for death and TPD insurance automatically when you join. If you need more cover, for example income protection, check the fund offers this before joining. Check the fund's PDS to understand the default level of cover offered and the cost.
How to compare different types of super funds
Regarding the different types of super funds, you have 2 main choices to make: choosing a super fund, then choosing the investment option within that fund.
Types of super funds
- Industry super funds: These not-for-profit funds were often originally reserved for workers in a particular industry, but are now open to all Australians. These funds are owned and run by members, with profits going back into the fund. Some will still offer certain features for people in a particular sector. For example, Cbus is the industry fund for building and construction workers and offers tailored insurance cover to suit these manual, high-risk jobs. However, you're not required to join the super fund aligned with your industry.
- Retail super funds: These funds are often owned by a bank, insurance provider or another type of large financial institution. They often offer easy access to other financial products and services, such as financial advice and insurance. Profits are distributed among shareholders as well as put back into the fund. Some examples are BT Super (owned by Westpac), Colonial First State (owned by CommBank) and Australian Ethical Super.
How to compare superannuation investment options
When you join the super fund you'll initially be placed in its default product option which is called the MySuper product (usually this is the balanced option). This is the standard super investment option that is designed to suit most members and it's where the majority of Australians have their super invested.
The alternative super investment options are usually based around risk level and asset class, for example:
- Conservative: This option will invest in more defensive, low-risk assets like cash and bonds. It's designed to protect your balance, rather than achieve high returns.
- Balanced or growth: A balanced or growth option offers a more even mix between defensive and growth assets, but it'll still skew more towards growth assets.
- High growth: These options invest heavily in shares and are more high-risk in the short term, but usually achieve better returns over the long term.
- Single sector options: Unlike the previous 3 options which are diversified funds, single sector investment options will invest entirely into one asset class such as shares.
Some funds offer an ethical investment option too.
Single sector options compared to mixed fund options
Mixed or diversified investment options - such as balanced, growth and high growth options - invest in a variety of different asset classes. A typical mixed fund will invest in Australian shares, international shares, property (listed, residential and commercial), private equity, unlisted assets (such as infrastructure), fixed interest and cash.
Single sector investment options will instead invest entirely in one particular asset class. For example, if you wanted to, you could choose an Australian shares single sector option and invest 100% of your super balance in Australian shares.
Investing your whole super balance into just one single sector option is very high risk, because you're putting all your eggs in one basket. If you like the idea of investing into single sector options and having a bit more control over how your super is invested, you can split your balance up between various single sector options. Or, you could also choose to split your super balance up between a mixed fund and a single sector option (or a few!).
In terms of fees, single sector options are much lower cost. For example, AustralianSuper Balanced has annual fees of 0.76% of your balance, while AustralianSuper Australian Shares has annual fees of just 0.42%.
How different super investment options perform
Typically you can expect a high growth option to achieve better returns over the long term compared to a balanced or conservative option. However, they can also experience more volatility in the short term as having increased exposure to shares makes them more vulnerable when there's a market fall.
Executive director at SuperRatings Kirby Rappell said high growth options are generally recommended for younger people with a long investment timeframe, as you have plenty of time to recover from short-term market falls.
"If you are not approaching or in retirement, keep in mind that all market movements in the short term are not likely to be what you are thinking about when you retire in 20 or 30 years' time."
As you can see from the table below, over the past decade balanced funds have achieved an average return of 7.50% p.a., while high growth funds have achieved 8.90% p.a.
When looking at high growth single sector options (such as funds that invest exclusively in shares), the average return over the past year is much higher than that of balanced funds - 14.7% versus 9.3%. This is because the share market has had a strong year. When you look at the average return of these options over the past decade they're much closer, 9.40% p.a. versus 7.50% p.a., although the single asset class options have still performed better (as you'd expect).
|Investment option||Average 1-year return||Average 5-year return||Average 10-year return|
|Single Sector (High growth)||14.70%||7.20%||9.40%|
Data is supplied by Chant West and relates to the performance period ending June 2023.
🔥 Quick tip when considering your super investment options
Alison Banney, superannuation editor
"You don't need to choose an investment option when you join a new fund if you don't want to. The default options are designed to suit most people, and many are among the top-performing funds each year. IF you do want to change your super investment option later, you can do this easily by logging in to your account online or via the fund's mobile app. "
Why should you compare super funds?
According to Finder data, 58% of Australians are with the super fund that their employer chose for them and almost half (48%) of us have stuck with the same super fund for our whole life so far.
But what if the fund your employer chose isn't great?
According to APRA's recent review into super funds published April 2023, 80 investment options were found to have significantly poor investment returns and a further 48 options had significantly high admin fees.
If you're stuck in one of these funds, it could cost you hundreds of thousands of dollars by the time you retire.
According to Finder data released in October 2023, 23% of Aussies say they don't have enough in their super fund or investments to retire on. Worryingly, that number is even higher for women with 27% admitting that won't have sufficient super or investments for their retirements.
How to choose the right super fund for you
If you're under 35
Because you have so much time on your hands, it's generally recommended you invest via a high growth investment option. Shares can be volatile in the short term, but continue to perform exceptionally well over the long term.
If you're 35–55
You still have 10–30 years before retirement, which is still plenty of time to stay invested in a high growth option. As you get closer to 50 you may have a lower risk tolerance and could consider gradually reducing your exposure to shares by switching to a balanced investment option.
If you're over 55
As you get closer to retirement it's generally advised to have a more balanced mix of investments. Your super will stay invested for many years even after you turn 55 so it's important to have some exposure to shares so your balance continues to grow, but you might not want all your balance invested in shares.
Remember, there's no set rule for how you should invest based on your age alone, these are just some general ideas to get you started.
Compare super fund fees for large balances
Most super funds outline their annual fees in their PDS based on a set balance of $50,000. Our comparison table above also shows the annual fees based on this balance, to allow you to properly compare apples with apples.
However, the fees can change quite significantly if you've got a larger balance above $50,000. Take a look at the annual fees charged on larger balances by these 10 popular super funds.
|$100K Balance||$300K Balance||$500K Balance||$1M Balance|
|AustralianSuper - Pre-mixed, Balanced option||$712||$2,032||$3,202||$6,002|
|Australian Ethical Super Balanced||$1,138||$3,278||$5,418||$10,768|
|Virgin Money Super - LifeStage Tracker||$635||$1,789||$2,943||$5,828|
|Australian Retirement Trust (formerly Sunsuper for Life) - Lifecycle Balanced Pool||$1,032.40||$2,972.40||$4,912.40||$9,762.40|
|Aware Super High Growth||$942||$2,722||$4,502||$8,202|
|HESTA Balanced Growth||$902||$2,602||$4,302||$7,802|
|QSuper Lifetime - Aspire 1||$900||$2,700||$4,500||$9,000|
|AustralianSuper High Growth||$702||$2,002||$3,152||$5,902|
The table shows the super fees for balances for over $50K. Fee data is sourced from Chantwest. The funds have been selected based on the top 10 most popular funds within the Finder database.
Steps to switch funds
1. Choose a new fund. The comparison table above can help you choose a new super fund.
2. Join the new fund. Complete the online application form available on the fund's website.
3. Move your super into your new fund. Just enter the details of your previous fund when you submit the application form and the new fund will arrange for your balance to be transferred over - you don't need to do this yourself.
4. Let your employer know. Let your employer know right away so they can pay your next super guarantee payment to the correct fund.
If you need a bit more help, see our guide on how to change super funds for a detailed process.
Frequently asked questions for super funds
Why you can trust Finder's super fund experts
Our comparison tables are completely free to use. We link you directly to the super fund's secure application page. Plus, you can access all of our research in our media room.
We've researched and rated hundreds of super funds as part of our Finder Awards. We've published 50+ guides and our in-house experts regularly appear on Sunrise, 7News and SBS News.
Unlike other comparison sites, we're not owned by a super fund company. That means our opinions are our own and you can compare nearly every super fund in Australia on Finder.
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