Top performing super funds on Canstar's database

TAMIKA SEETO
Finance Journalist · 31 August 2021
Canstar has identified the best-performing super funds on its database for annual investment returns over five and three years.

Super funds delivered strong returns in the 2020/21 financial year, despite share market volatility in the early stages of the COVID-19 pandemic. According to the Association of Superannuation Funds of Australia (ASFA), funds averaged annual returns of nearly 20%. This marks the system’s best performance since compulsory superannuation was introduced almost 30 years ago.

While these strong one-year returns will serve as good news for many Australians saving for retirement, when choosing a super fund it can be a good idea to look at investment performance over a longer period. Past performance can give an indication of what a fund has been able to deliver historically, but it’s important to bear in mind that it doesn’t mean a fund will necessarily be able to repeat that performance in the future. There are also other factors to consider, such as the fees charged, whether the insurance offering is suitable for you, as well as services such as the education and advice on offer.

Canstar has prepared a list of the top-performing super funds on its database over the last five and three years to 31 July 2021. You can also view seven-year and one-year returns using Canstar’s comparison tables.

Top performing super funds: five-year returns (average per annum)

The table below displays some of the superannuation funds currently available on Canstar’s database for Australians aged 30 to 39 with a super balance of up to $55,000. The results shown are sorted by 5-year return (highest to lowest). Performance figures shown reflect net investment performance, i.e. net of investment tax, investment management fees and the applicable administration fees based on an account balance of $50,000. To learn more about performance information, click here. Use Canstar’s superannuation comparison selector to view a wider range of superannuation funds. Canstar may earn a fee for referrals.

Top performing super funds: three-year returns (average per annum)

The table below displays some of the superannuation funds currently available on Canstar’s database for Australians aged 30 to 39 with a super balance of up to $55,000. The results shown are sorted by 3-year return (highest to lowest). Performance figures shown reflect net investment performance, i.e. net of investment tax, investment management fees and the applicable administration fees based on an account balance of $50,000. To learn more about performance information, click here. Use Canstar’s superannuation comparison selector to view a wider range of superannuation funds. Canstar may earn a fee for referrals.

To view the past performance of all super funds in Canstar’s database, use our comparison tables:

Compare Superannuation Funds

Why is performance important for super funds?

Superannuation is all about setting you up for the future, providing you with a large enough nest egg so that you can retire in comfort. So it’s important that while you’re still working, your super is working for you. The investment return that your super makes (its performance) is a key factor in this.

A small difference in average super performance, even as little as 1% a year, can really add up over time. Here is a hypothetical example:

The Difference 1% in Investment Returns Can Make on Superannuation Balance

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Scenario 1 Scenario 2 Scenario 3
Starting age 30 30 30
Retirement age 67 67 67
Starting gross
annual income*
$61,984 $61,984 $61,984
Starting balance** $25,096 $25,096 $25,096
Average
investment returns
6% 7% 8%
Annual fees
(% of balance)
1.42% 1.42% 1.42%
Average life
insurance premium
$266 $266 $266
Account balance
at retirement
$384,428 $480,903 $607,061
Difference to
Scenario 1
retirement balance
$96,475 $222,633

Source: www.canstar.com.au – 29/01/2021. **Based on a 30-year-old with a starting balance of $25,096 per APRA’s Annual Superannuation Bulletin, *starting gross annual income of $61,984, per ABS Median Weekly Earnings (Aug 2020) of a 25-34 year old, increasing by inflation (assumed to be 2.5% in line with the Reserve Bank’s target range of 2%-3%) each year, retiring at age 67. Employer contributions are presumed taxed at 15%. SG contribution amounts per Government-announced rates. Investment returns assumed to be 6%, 7% or 8% p.a. for scenario 1, 2 and 3 respectively. Net performance deducts average fees of 1.42% p.a., based on products in Canstar’s database for a 30-year-old with a $20,000 balance. Average life and TPD insurance premium of $266 is assumed to be charged at the end of each year, based on products in Canstar’s database for those aged 30 years. End balance at retirement amounts are shown in “today’s dollars”, i.e. they have been adjusted for inflation. Please note all information on income, annual superannuation fees and performance returns are used for illustration purposes only. Actual returns and the value of your investment may fall as well as rise from year to year; this example does not take such variation into account. Past performance is not a reliable indicator of future performance.

As you can see, a small difference in performance could cost you tens of thousands of dollars by the time you retire, all other factors being equal.

Canstar can help you compare available super funds, and their performance, so you can see which one might suit you.

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