Your super will do better in an industry fund

Font size :

 

Although 2011 was another disappointing year for super fund members, industry funds once again delivered better returns than their retail counterparts.
 
Unlike retail funds, industry funds are member-owned and not-for-profit. The retail versus industry fund comparison is analogous to credit unions and banks. About half of the country’s workforce (about five million people) uses an industry fund for their superannuation.
 
A report released by superannuation research firm Chant West found that the average return from an industry fund declined by 0.7% in 2011. The average decline among retail funds was a much more substantial 3.1%.
 
Of Chant West’s list of top ten balanced growth funds, only seven produced a positive return. In their analysis, Chant West found QSuper, a fund for those employed by the Queensland government, produced the highest one-year return of 2.6%.
 
This is the second year in a row that industry funds have beat their retail rivals; and the sixth time in the past decade.
 
Chant West’s Mano Mohankumar says that industry funds tend to invest in “unlisted assets” such as buildings and private equity funds, and have less exposure in ASX-listed shares which performed poorly last year.
 
“Over the longer term, the strategic allocation policies of industry funds have served them very well,’ says director Warren Chant.
 
Australian shares fell by 11% in 2011, and international shares dropped 5%. “The average returns over 5, 7 and even ten years don’t look particularly healthy, but everyone needs to remember that they are dominated by the ‘black swan’ event that was the GFC” says Chant.
 
Sweet super funds
 
In our recent comparison of super stars, these industry super funds topped the YMM list:
 
1. Hostplus
Member fee: $78
Asset administration fee: nil
Investment fee: 0.7%
10-year balanced return: 6.1%
 
2. CareSuper
Member fee: $78
Asset administration fee: 0.2% (capped at $500)
Investment fee: 0.76%
10-year balanced return: 6.6%
 
3. REST
Member fee: $52
Asset administration fee: 0.1%
Investment fee: 0.7%
10-year balanced return: 7%
 
-- By Stephanie Hanna

 

Whether you are looking to buy your first home, move home, refinance, or invest in property, a mortgage broker can help. Access loans from all the major lenders, get help with paperwork – plus there is no charge for this service. Get help from a local mortgage broker

Mortgage News and Articles

How to tell when a housing market is cooling How to tell when a housing market is cooling

You need to check clearance rates, listings, and the price gap, among other factors Read more

Growing demand for green apartments in Sydney Growing demand for green apartments in Sydney Both owner-occupiers and investors favour eco-friendly buildings for their energy-saving features and reduced environmental footprint ... Read more

Are property investors as rich as they appear? Are property investors as rich as they appear? A multi-property portfolio doesn’t guarantee easy millions ... Read more

Be proactive about getting a better mortgage deal Be proactive about getting a better mortgage deal Apathy could be costing you a considerable amount of money over the lifespan of your loan ... Read more

More mortgage news and articles

Sponsored Links

Monday, Sep 25, 2017
Top Featured Rates
Top Bank Rates

Get help choosing the right home loan

Let us help you find the right home loan for your needs.

Tell us a bit about your circumstances:
  • Purpose of mortgage
  • Household Income
    $
  • How much do you want to borrow?
    $
  • How much deposit do you have?
    $
  • How much is your house worth?
    $
  • How much do you still owe on your mortgage?
    $
  • What type of mortgage do you have?


  • How much is your new home?
    $
  • How much do you want to borrow?
    $
  • How soon do you want a mortgage?
Next
  • First name
  • Last name
  • Where do you live?
  • Phone number

Special Offers

Related Keywords