Bank staff funds top super list
In contrast, funds offered by banks and wealth managers to the public have underperformed over the last decade, according to a snapshot of the $1.4 trillion sector.
Goldman employees enjoyed average returns of 9 per cent a year since 2004, more than any other large fund over the last nine years.
The second best performer was the CommBank's staff fund, which returned 7.8 per cent a year. In third place was the fund for Worsley Alumina workers, at 7.5 per cent.
The rankings were published by the Australian Prudential Regulation Authority, which also said super funds had posted average returns of just 0.5 per cent in the year to June 2012 as weak markets hit balances.
In the decade to June, super funds returned an average of 4.4 per cent a year. However, there has been a significant gap between funds.
Public sector funds have been the best performers, returning 5.5 per cent, while union-linked industry funds returned 5.1 per cent and in-house corporate funds 4.8 per cent.
Higher-cost retail funds - including those offered by the big banks and AMP - have underperformed with 10-year returns of 3.4 per cent.
The chief executive of the Australian Institute of Superannuation Trustees, Fiona Reynolds, said the gap between retail funds and non-profits was "nothing to be sneezed at". "Over a 30- to 40-year working life of superannuation contributions, an outperformance of one or two per cent every year can make a very big difference to an individual's retirement outcome," said Ms Reynolds.
APRA's snapshot of the 200 biggest funds found the best-performing retail fund over nine years was the Tidswell Master Superannuation Plan, in fourth place with annual returns of 7.1 per cent. Perpetual's WealthFocus Superannuation Fund was the only other retail fund in the top 50 funds over nine years. Unisuper was the top-performing industry fund, equal fourth, while the Australia Post Superannuation Scheme was the best-performing public fund.
Despite posting weaker returns over nine years, retail funds have fared much better over the last five years, occupying the two top spots on the ladder.
In the competitive market to manage the public's retirement savings, APRA's ranking tables are not without their critics. The investment research manager at consultancy Chant West, Mano Mohankumar, said they did not take into account individual products, , which often had different goals.
Since June last year, super funds have enjoyed a sharp rally, with analysts estimating the typical fund delivered double-digit returns over the 2012 calendar year.
Frequently Asked Questions about this Article…
APRA’s ranking showed in-house staff funds leading the list: Goldman Sachs’ staff fund was top with average returns of 9% a year (since 2004 and the highest over the nine-year period measured), followed by the Commonwealth Bank (CommBank) staff fund at 7.8% and the Worsley Alumina workers’ fund at 7.5%.
APRA reported that super funds posted average returns of just 0.5% in the year to June 2012. Over the decade to June, the typical super fund returned an average of 4.4% a year.
APRA’s snapshot found public sector funds were the best performers over the decade, returning 5.5% a year, followed by union-linked industry funds at 5.1% and in-house corporate funds at 4.8%.
Yes — higher-cost retail funds, including those offered by the big banks and AMP, underperformed over the 10-year period with average returns of 3.4% a year, according to APRA’s data.
A few did: APRA found the Tidswell Master Superannuation Plan was the best-performing retail fund over nine years, placing fourth with annual returns of 7.1%, and Perpetual’s WealthFocus Superannuation Fund was the only other retail fund in the top 50 over nine years.
As Fiona Reynolds of the Australian Institute of Superannuation Trustees noted, an outperformance of one or two percentage points each year over a 30–40 year working life can make a very big difference to an individual’s retirement outcome — small annual gaps compound significantly over decades.
APRA’s rankings are useful but not without critics: Mano Mohankumar from Chant West pointed out the tables don’t account for differences between individual products, which can have different goals and risk profiles, so investors should consider product-level detail as well.
Yes — since June of the previous year APRA noted a sharp rally in super markets, and analysts estimated the typical fund delivered double‑digit returns over the 2012 calendar year.
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