The super funds with the highest, and lowest, fees in Australia for 2018

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  • Stockspot released its annual Fat Cat Funds Report analysing the best and worst Australian super funds.
  • The Fat Cat Funds Report gave the gold Fat Cat award to ANZ/OnePath as the worst performer.
  • Unisuper topped the Fit Cat Awards lists as the best.

Stockspot, the robo-advice fintech, released its annual analysis of the best and worst performing superannuation funds in Australia.

The Fat Cat Funds Report, now in its sixth year, looks at the performance of the 500 largest superannuation multi-asset fund options offered by more than 100 of the largest super funds managing a combined $1.61 trillion.

The report rates the worst 40 Fat Cat Funds and top 40 Fit Cat Funds and how each has performed after fees since 2013.

The best performing fund can return more than twice as much to its members as the worst fund.

The top performer in the high growth funds was MLC Superannuation Fund (MLC Horizon 7 Accelerated Growth Portfolio) with 14.10% a year over five years.

The worst in the high growth funds was OnePath (Masterfund-OptiMix Balanced Trust) with 6.12%.

ANZ/OnePath (now owned by IOOF after being sold by the bank) won the gold award to head the Fat Cat Fund list for the sixth year in a row.

A quarter (25%) of the worst 40 funds were those at the ANZ.

The average fund in the Fat Cat list charges 2% in fees every year, meaning someone in their 20s or 30s could lose $250,000 in fees by the time they retire.

“Every year we pressure ANZ to reduce fees or move clients to better super options. Instead we have observed that many of their poor performing funds have increased (not shrunk) in size,” says Chris Brycki, CEO and founder of Stockspot.

“We hope IOOF reduce the fees on these funds.”

Unisuper, which services university academics and staff, topped the Fit Cat awards lists. Most (80%) of the top 40 Fit Cat Funds were Industry or Corporate super funds.

However, industry and corporate funds also made up almost half (45%) of the worst 40 funds.

“Conflicts of interest are rampant in Australian superannuation and cause Australians to lose hundreds of thousands in fees over their lifetime,” says Brycki.

“In our submission to the (financial services) Royal Commission we recommend government create a low-cost super fund for all default super money. This would be a start to creating a fairer super system.

“For most people superannuation will probably be their biggest source of savings. It is vital you get your money working for you, not for the Fat Cat Fund managers.

“There are a lot of things you can’t control in life, but you can control what you pay a super fund to manage your hard-earned money for you. Call, email and hound your super fund and demand to know what you pay in fees. If it’s more than 0.75% consider moving it elsewhere.”

Here are the top 10 Fit Cat Funds for Balanced Funds:

Stockspot

The top performers in the balance funds group had a 48% allocation to fixed income and cash. This helped them achieve returns of 7% to 9% a year over five years. Industry and corporate funds made up eight of the ten Fit Cat Funds.

The bottom 10 Fat Cat Funds for Balanced Funds:

Stockspot

The bottom performing funds typically had a higher (53%) allocation to cash and bonds and higher fees. This dragged down their performance to 3% to 5% a year.

The Top 10 Fit Cat high growth funds:

Stockspot

The top performing funds had very little fixed income and cash. This helped them achieve returns of 12% to 14% a year over five years as growth investments have enjoyed strong returns in recent years.

And the bottom 10 Fat Cat high growth funds:

Stockspot

The bottom funds typically had more (15%) cash and bonds and higher fees (an average of 2.2%). This dragged performance down to 6% to 8% a year. OnePath featured heavily in this Fat Cat list with four of the ten worst performing funds.

Stockspot’s Fat Cat ratings are based on data relating to a fund’s investment mix and published returns.

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