Industry funds continue to outperform retail funds

By Jessica Yun and Killian Plastow
 — 1 minute read

The financial performance of industry funds has outpaced retail funds for the third month in a row after trailing behind for the seven months prior, according to Roy Morgan.

The research house’s November 2017 Superannuation Satisfaction Report has revealed the satisfaction with the financial performance of industry super funds at 59.2 per cent, while their retail peers achieved 57.5 per cent.

SMSF super funds had performed best of all at 71.9 per cent, but the report pointed out that this high level of satisfaction with SMSF super funds only applied for those with super balances of $700,000 or more.


Source: Roy Morgan

“The overall lead in satisfaction among SMSFs (71.9 per cent compared to industry funds 59.2 per cent and retail funds 57.5 per cent) is a result of the fact that they really only operate with larger balance accounts, where satisfaction for all super types is higher,” the report said.

“Although SMSFs are the satisfaction leader in the $700,000+ segment, industry funds lead them and retail funds in balances between $100,000 and $699,999.”

The report also demonstrated that major retail funds were not among the best performers in terms of satisfaction, with the top five taken out by industry funds.

The highest-ranking retail super fund was Colonial First State, coming in at sixth place.

Roy Morgan communications director Norman Morris advised fund members not to track super funds too closely but rather to “measure members satisfaction with performance overall and by account balance”.

“It is important for super fund members not to be influenced by short-term fluctuations in performance across funds, for what is a very long-term investment,” Mr Morris said.

Those with over $700,000 in their super balances only represented 4 per cent of fund members, but held 24.1 per cent of total funds in superannuation, he added.

“It is in this segment that SMSFs are having major success against industry and retail funds and where satisfaction is highest,” Mr Morris said.

“Of the 15largest funds measured for movements in satisfaction over the last year, nine showed an improvement and six showed a decline.

“We have seen over the years that these movements are often reversed, making the chasing of short-term winners rather precarious.”


Industry funds continue to outperform retail funds
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