Aussies in these 32 super funds could be $200,000 worse off by retirement

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  • Online investment adviser StockSpot has released its 2019 Fat Cat Funds Report, naming and shaming the most overpriced and underperforming superannuation funds in Australia.
  • Super funds managed by ANZ Bank, wealth managers AMP, MLC and Perpetual and life insurer Zurich were found to be the worst, with ’32 fat cat funds’ identified.
  • StockSpot also named the 19 so-called ‘fit cat funds’, with Brisbane-based QSuper’s products crowned the best value for investors.

If you’re a 35-year old earning $78,192 per year and you have your super with ANZ or AMP you could be exactly $200,670 worse off when you retire.

That’s the conclusion of the seventh annual Fat Cat Funds Report by online investment adviser StockSpot, which names and shames Australia’s worst value superannuation funds and has found the average Aussie super investor stands to lose that alarming amount in some funds.

StockSpot — which does not operate a super fund — has found funds by ANZ Bank’s OnePath business and wealth manager AMP to be tied for the unenviable title of “Australia’s worst fat cat”, with 11 funds each making the naughty list. The list is compiled off the back of analysis of the funds’ investment returns over a five-year period after fees are taken out.

More than half of the 40 funds on the fat cat list are operated by these two providers, according to StockSpot. Funds operated by Perpetual, NAB-owned MLC and life insurer Zurich joined them on the list.

Aussies who keep their super in these funds face an average of 2.07% in fees, when many better-performing funds charge just 1% or lower. Collectively the fat cat funds manage $7 billion in super money, which costs Australians a whopping $150 million per year in fees.

“I know 1% doesn’t sound like a lot, but for the Aussies stuck in these fat cat funds they’ll be worse off by $200,000 or more compared to their friends who are in a low-fee fund,” said StockSpot founder Chris Brycki, author of the report.

“One of our golden rules of superannuation is: the less you pay, the more you get. Always pay less than 1% p.a. in fees so your super isn’t eroded by high fees.”

One of those funds charging 1% or less is QSuper, the Queensland State Public Sector Fund, which took out top spot in the ‘fit cat funds’ list, followed by fellow industry super funds UniSuper and AustralianSuper.

Here are the worst performing super funds in Australia:

Source: StockSpot Fat Cat Funds Report 2019.

Here are the best performing super funds in Australia:

Source: StockSpot Fat Cat Funds Report 2019.