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Choosing a super fund: A step-by-step guide

When choosing a super fund look for one with low fees, high past performance figures and an investment strategy you're comfortable with.

Employees can select their super fund using the Australian Taxation Office's Superannuation standard choice form provided by their employer when starting a new job. This choice empowers workers but choosing a fund can be complex due to the numerous products from retail and industry funds.

In Australia, there's a wide range of superannuation funds and investment options. It's important to compare super funds based on key factors like competitive fees, strong past performance, a mix of investment and insurance options, and additional services like easy online fund rollover.

So when choosing a super fund, look for these features:

  • High past performance figures, particular 5 and 10-year figures
  • Low fees compared to other funds (preferably annual fees less than 1.5% of your balance)
  • An investment strategy that suits your risk tolerance and preferences

Performance, fees, and strategy are 3 key features to look for when choosing a super fund. However there are other features as well, which we'll go into these points in more detail later in this guide.

How to choose a super fund

Understand your super fund options

A key part of choosing a super fund is understanding the options which impacts risk, returns and fees. This means users should know what options are available and what they are.

It's important to be aware of the different fund options available, as they can significantly impact your investment's risk, returns, and fees.

Here's an overview of the types of options typically found in super funds, along with their usual asset mixes. Keep in mind that the specific asset mix can vary from fund to fund.

Conservative funds:
  • Risk level: Conservative (21-40%)
  • Asset mix: Primarily lower-risk investments like bonds and cash, with a smaller portion in shares and property. These funds aim for stable returns and lower risk, ideal for those who prefer a cautious investment approach or are close to retirement.
Balanced funds:
  • Risk level: Growth (61-80%), often chosen as MySuper options.
  • Asset mix: A diversified portfolio that includes shares, property, bonds, and cash. These funds aim to achieve a balance between risk and growth, making them a popular choice for a wide range of investors, particularly as a default option set by employers.
High growth funds:
  • Risk level: High Growth (81-95%) to All Growth (96-100%).
  • Asset mix: Mainly high-risk investments like Australian shares (Aust Shares), International shares (Int'l Shares), and property. These funds target higher returns over the long term but are associated with greater volatility and risk. They are typically chosen by investors with a longer investment horizon and a higher tolerance for market fluctuations.
Single asset class funds:
  • Asset mix: These funds concentrate on a single asset class, such as Fixed Income, Australian Shares (Aust Shares), International Shares (Int'l Shares), or Property. By focusing on one type of asset, these funds offer a more targeted investment approach but with higher risk due to lack of diversification.

Here it's important to note that, the risk level for single asset class funds can vary significantly depending on the specific asset class chosen. For example: Fixed income - Generally lower risk compared to shares or property. Australian Shares (Aust Shares) and International Shares (Int'l Shares) - typically carry a higher risk due to market volatility. Another one is property - can be moderate to high risk, depending on market conditions and specific property investments. Single asset class funds offer a focused investment approach, but the risk is concentrated since they lack diversification across different asset types.

Indexed funds:
  • Asset mix: Indexed funds are a relatively newer type of superannuation fund option. These funds track a specific market index, such as the ASX200. They are passively managed, leading to lower fees. These funds aim to mirror the performance of their benchmark index, offering a cost-effective way to invest in a broad range of assets.

Similarly, the risk level of indexed funds depends on the market index they track. For example, an index fund tracking a broad market index (like the ASX200) would generally have a risk level similar to a diversified share portfolio, which can be moderate to high. If the index is focused on a specific sector or type of asset, the risk could be higher or lower depending on the nature of those assets. Indexed funds aim to replicate the performance of their benchmark index and can be a cost-effective way to invest in a broad range of assets. The risk is associated with the market or sector the index represents.

Pick a fund with great returns

When selecting a superannuation fund, one of the key considerations should be the fund's historical performance, particularly its long-term returns. It's important to focus on the average rate of returns over an extended period, like 10 years, as this provides a more accurate picture of the fund's performance through various market cycles.

Average rate of returns for different types of funds:
  • Balanced funds: Typically, you should look for balanced funds that have consistently delivered returns better than 7%. Balanced funds are a mix of risky and conservative assets, aiming to strike a balance between risk and reward.
  • Conservative funds: For conservative funds, which are more risk-averse and invest more in bonds and cash, a good benchmark would be returns better than 5%.
Focus on Long-Term Returns:

The importance of focusing on long-term returns cannot be overstated.

Short-term fluctuations in the market can be misleading; what matters more is how the fund performs over periods like 10 years. This long-term view can give you a better sense of how the fund navigates through different economic cycles and market conditions.

To illustrate the impact of even a 2% difference in returns, let's consider different hypothetical examples to understand the impact. We'll use the superannuation calculator to compare the outcomes.

Let's say you're 25, earning $80,000 a year, making no additional contributions and have a current super balance of $30,000. Your annual fees are $300 and your rate of return is 7% p.a. Your projected super balance by age 65 is $514,260.

Starting balanceAnnual feesReturn rateAdditional contributionsProjected balance at 65Additional balance at 65
$30,000$3007% p.a.$0 / year$514,260-
What happens when you reduce your super fees?

The calculator is also designed to show you how much your retirement balance can increase by switching to a super fund with lower fees or higher returns (or both!).

Using the exact same situation as above, and changing nothing but reducing the fees from $300 a year to $150 a year, your new projected balance at 65 would be $522,797. That's an extra $8,537 in your balance at retirement, just by switching to a fund with lower fees.

Starting balanceAnnual feesReturn rateAdditional contributionsProjected balance at 65Additional balance at 65
$30,000$1507% p.a.$0 / year$522,787$8,537
What happens when you increase your super returns?

You can also use the calculator to see how much your balance is impacted when you change your rate of return.

Once again using the same example, except this time changing only the return rate from 7% p.a. to 9% p.a., your new projected balance at 65 would be $633,821. That's an extra $119,561 in your balance when you retire!

Starting balanceAnnual feesReturn rateAdditional contributionsProjected balance at 65Additional balance at 65
$30,000$3009% p.a.$0 / year$633,821$119,561
What happens when you make extra super contributions?

The calculator can also show you the power of making small, additional contributions into your super over your working life.

Using the same example, let's say your fund details stay exactly the same but you make additional annual contributions of $1,000 per year into your super. You'll instead retire with a projected balance of $574,557 - an extra $60,297.

Starting balanceAnnual feesReturn rateAdditional contributionsProjected balance at 65Additional balance at 65
$30,000$3007% p.a.$1,000 / year$574,557$60,297

Choose a fund with low fees

As with most fees generally, the lower the better. Consider:

  • Whether they're worth it. You might come out ahead paying more fees for better investment returns, rather than choosing a low-fee fund that has consistently underperformed.
  • Exactly how much you're paying: Superannuation fees can be extremely confusing. Ideally you'll want to understand exactly how much you're paying in fees, and consider this as a percentage of your super balance. As a loose rule of thumb, try to aim for annual fees that are less than 1.5% of your balance.
  • Why the fees are higher or lower. A lot of super funds offer passive, index-based investment options which are much cheaper than actively managed options.

Need a bit more help choosing? No worries! Let's take a look at other features you want in a super fund in more detail.

Investment options and strong past performance

Super funds are basically big investment portfolios, with professionals who invest members' money on their behalf. Historical performance of the fund, typically expressed as a percentage, is generally a measure of the return on investment the fund has achieved previously. You'll mostly want to look at the fund's performance for the last 5-10 years, as long-term performance is a better indicator than short-term performance.

While historical performance isn't everything and past performance is not an indication of future performance, it's definitely an important factor to look at when choosing a super fund.

As well as performance make sure you take a look at:

  • Investment options available. If you're looking for a particular type of investment option, such as a high growth option, check if the fund offers this before joining.
  • How much control you have. Some people might want a managed super fund that still lets them do some of their own investing. Others might be particularly keen on the forex market, share trading, property or other investment types, and want a super fund that lets them put their money where they want it most.
  • Ethical investing. If you'd prefer your savings to be invested ethically, such as in renewable energy rather than coal mining, you might want to consider an ethical super fund.

The insurance options

Most super funds offer insurance policies within your account, which are often slightly discounted. Generally, you can get a basic level of insurance cover for:

To compare the insurance cover offered by two different super funds you may want to look at:

  • The types of cover: Do they both offer life, TPD and income protection insurance, or does one of them offer fewer cover types? Do they even offer any insurance at all?
  • The payout: How much is paid out for each of the three cover types?
  • The premiums: How much is it costing you? The cost of insurance will be taken out of your investment returns.
  • Can you increase your cover? If you want more insurance cover, check how much you can increase your level of cover by.

All three insurance types can be found through super funds, or outside of superannuation instead. However, they work a bit differently in each case. In very basic terms, you might think of super insurance as the cheap "no-brand" option, and insurance outside of super as the "deluxe brand name" option. Depending on your situation, you might want to have it all inside super, all of it outside super, or a combination of both.

Ready for a new super fund? Compare your options now

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Name Last 1 year performance (p.a.) Last 3 year performance (p.a.) Last 5 year performance (p.a.) Last 10 year performance (p.a.) Fees on $50k balance (p.a.)
Australian Ethical Super Growth
Green CompanyEthicalHigher risk
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Hostplus Balanced
Industry fund
Last 1 year performance (p.a.)
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Go to siteMore Info
Aware Super High Growth
Industry fundHigher risk
Last 1 year performance (p.a.)
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Fees on $50k balance (p.a.)
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Australian Retirement Trust - Growth
Industry fundHigher risk
Last 1 year performance (p.a.)
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Fees on $50k balance (p.a.)
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HESTA Balanced Growth
Industry fund
Last 1 year performance (p.a.)
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UniSuper - Balanced
Industry fund
Last 1 year performance (p.a.)
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Spirit Super - Balanced (MySuper)
Industry fund
Last 1 year performance (p.a.)
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Australian Retirement Trust - International Shares Index (unhedged)
Finder AwardIndustry fundIndexed investmentHigher risk
Last 1 year performance (p.a.)
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Virgin Money Super - LifeStage Tracker
LifestageHigher risk
Last 1 year performance (p.a.)
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Australian Ethical Super Balanced
Green CompanyEthical
Last 1 year performance (p.a.)
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Fees on $50k balance (p.a.)
Go to siteMore Info
Showing 10 of 51 results

Unless indicated otherwise, the information in the table is based on data provided by SuperRatings Pty Limited ABN 95 100 192 283, Australian Financial Services Licence 311880.

*Past performance data and fee data is for the period ending Feb 2024

Finder survey: What features matter most to Australians when choosing a super fund?

Low fees77.56%
Strong performance returns76.97%
Brand reputation26.18%
Customer service18.5%
Type of investment option15.65%
Ethical and socially responsible investments13.39%
Risk exposure11.42%
Insurance options8.66%
Fund size7.19%
Super funds app5.02%
None of the above2.26%
Number of awards won1.57%
Source: Finder survey by Pure Profile of 1016 Australians, December 2023

Choosing a super fund

When it comes to choosing a superannuation fund, different individuals have unique needs based on their employment status, duration of stay in Australia, and financial goals.

The process of choosing a super fund can be quite personalised, and it's important to consider these factors to find the most suitable option for your circumstances.

a) Choosing a super fund for a student

Students typically have different financial priorities and may not have a steady income. When choosing a super fund, students should look for:

  • Low fees. Since students often have lower balances, it's crucial to find a fund with low fees to avoid eroding the balance.
  • Flexible contribution options. Given the irregular income students might have, a fund that allows flexible contributions can be beneficial.
  • Insurance options. Students should consider if the fund offers appropriate insurance cover, like income protection, which can be valuable during their study period.

b) Choosing a superannuation for temporary residents

Temporary residents need to consider their duration of stay in Australia when choosing a super fund:

  • Portability of the fund. For those who might leave Australia, a super fund that allows easy transfer of benefits to an overseas retirement account can be a good choice.
  • Tax implications. Understanding the tax implications on superannuation, especially when leaving Australia, is crucial.
  • Access to funds. Certain funds might have provisions that cater specifically to the needs of temporary residents, including access to funds after leaving the country.

c) Choosing a super fund for a backpacker

Backpackers usually have unique requirements due to their transient nature of work and travel:

  • Flexibility and accessibility. A fund that offers online access and easy management is ideal, as backpackers are often on the move.
  • Competitive fees and returns. Since the contribution period might be short, choosing a fund with competitive fees and good returns is advisable.
  • Withdrawal options. Backpackers should understand the conditions and processes for withdrawing their superannuation, especially if they plan to leave Australia permanently.

In each case, the key to choosing a superannuation fund lies in understanding personal circumstances, financial goals, and the specific features and benefits that different super funds offer.

How to choose between the different types of super funds

There are various types of super funds which can be put under two different categories – profit for member funds and retail superannuation funds. Although there are still debates going on which category is better, understanding them is much better since their advantages and disadvantages are relative to the needs that you have.

Types of super funds

Broadly, funds in Australia are mainly of two types: accumulation and defined benefit funds.

In accumulation funds, the value of your super grows over time based on contributions from you and your employer, as well as investment returns, after accounting for fees and costs

Defined benefit funds, on the other hand, calculate your retirement benefit through a formula considering your and your employer's contributions, your average salary before retirement, and the length of your employment. These are commonly found in corporate or public sector funds but are less common now and often closed to new members.

Compare the different types of super funds available using our table below.

Super fund typeFeatures
MySuperMost employers are required to offer a MySuper fund as a default option for people who cannot (or don’t wish to) select their own fund. These are generally found as defaults, but you may also nominate a MySuper fund. It’s designed to be a safe option for most Australians.

  • Low fees
  • Opt-out life insurance
  • Straightforward investment options
  • All-around simplicity
  • Balanced or Growth investment option
  • Usually accumulation funds
Retail fundsRetail funds are widely-available commercial products, operated by financial institutions such as banks and insurance companies.

  • A wide range of investment options and more complex investment products
  • May be integrated with other financial products
  • May give customers more in-depth control of investments
  • Are often owned by banks
  • Opportunity to gain financial advice
  • Mainly accumulation funds
Industry fundsThese superannuation funds are generally designed for workers in a specific industry, however most are open to everyone to join. They're not-for-profit funds that exist for the benefit of super members only, and aren't part of a wider financial institution. They are owned by members not shareholders.

  • Lower fees
  • A range of insurance options
  • Simple range of investment options
  • Aligned to a particular industry or sector
  • Primarily accumulation funds, some older ones may have defined benefit members
Public super fundsPrimarily for government employees, these funds generally feature a modest range of investment choices. They often combine accumulation and defined benefit members, with newer members typically in accumulation funds.

  • Lower fees
  • Many provide MySuper products
  • Focus on returning profits to the fund
Corporate super fundsSet up by employers for their employees, these funds can be managed by large companies or operated by retail or industry funds.Corporate funds provide a variety of investment options, especially those managed by larger funds.

While some older funds are defined benefit, most are accumulation funds. They tend to have low to medium costs, particularly for large employers, and aim to return all profits to members, except those run by retail funds.

Self-managed super fund (SMSF)The do-it-yourself super fund. You are responsible for investing your superannuation, as well as looking after the tax and legal obligations that go along with it. These are explained in more detail in this guide, however it's not recommended that you start an SMSF unless you're a confident investor with a large balance of at least $250,000.

  • Typically accumulation funds, as they are managed by the members themselves.

Should I stay with the default Mysuper product or change super funds?

Deciding whether to stay with a default MySuper product or switch to a different super fund depends on individual financial goals and circumstances.

While MySuper products, typically balanced funds, are designed as a default option with simplicity, low fees, and basic features, it's worth comparing them with other super funds.

Other funds might offer better returns or lower fees, and could be aligned with your risk tolerance and investment goals. It's advisable to review and compare the performance, fees, and features of various funds, and consider switching if you find a more suitable option.

Should I choose to have insurance cover within the super fund?

Deciding whether to have insurance cover within your super fund depends on your personal circumstances and needs.

It's important to consider factors like your financial responsibilities, dependents, health, and existing coverage outside super. Insurance through super can be cost-effective as it's often cheaper and premiums are paid from your super balance, not out-of-pocket.

However, it may reduce your retirement savings. It's crucial to assess the type and level of cover you need and compare it with what's available outside super.

When can you not choose a super fund?

You are not eligible to choose a super fund for your super guarantee contributions if:

  • If your super is governed by a state award or registered agreement.
  • When it's under workplace agreements made before 1 January 2021 that specify super contributions.
  • If you're a federal or state public sector employee.
  • If you're in a specific type of defined benefit fund or have reached a certain benefit level.

For comprehensive details on employment rules in Australia and guidelines on when a contractor qualifies as an employee for super guarantee purposes, it's recommended to visit Fair Work Australia's website and the Australian Taxation Office.

Frequently asked questions

Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading CFDs and forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades. Read the Product Disclosure Statement (PDS) and Target Market Determination (TMD) for the product on the provider's website.

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8 Responses

    Default Gravatar
    SinghAugust 25, 2023

    Which super is best on growth and low on fees

      AlisonSeptember 21, 2023Finder

      Hi, we aren’t able to offer any product recommendations or advice. There’s no one super fund that is ‘best’ for everyone. You can compare funds with our comparison table, and use the headings at the top of the table to sort by fees or performance returns:

    Default Gravatar
    MikaApril 19, 2023

    I wanna start working and they asked be Superannuation but don’t know which one I choose

      AlisonApril 21, 2023Finder

      Hi Mika,
      You can learn more about how to compare super funds with our guide:
      A few things to look for when choosing a fund is: low annual fees, high long-term returns and an investment strategy you understand and agree with. If you’d like some personal advice on which super fund would be best suited for you we suggest you speak with a financial adviser.

    Default Gravatar
    SupawanDecember 27, 2018

    The amount of my superannuation has been decreasing. I didn’t notice before so I change my super fund and I found that it is decreasing as well. What should I do?

      JeniDecember 28, 2018Finder

      Hi Supawan,

      Thank you for getting in touch with Finder.

      I suggest that you seek financial advice on how your super could increase.

      I hope this helps.

      Please feel free to reach out to us if you have any other enquiries.

      Thank you and have a wonderful day!


    Default Gravatar
    IsabelleFebruary 18, 2018


    My partner is self-employed, 50 years old and never have had a superannuation. Now I try to figure out what he will need.
    He works in the computer industry and has not a huge income. Do you have any tipps where he can look for a super or what we have to think about to choose clever the super?

    Thank you so much for your help!

      Default Gravatar
      JoelMarch 9, 2018

      Hi Isabelle,

      Thanks for leaving a question on Finder.

      Your partner who is self-employed can avail of his own choice of the super fund since anyone who is in the workforce can choose any superannuation fund to undertake. You can check which form of contribution and the super fund will work for him. You can also consider speaking to a financial adviser for professional, personalized advice.


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