There are a few posts in the past regarding Super Fund, but nothing recently.
I recalled when I first started working my Super Funding returned 20% in one good year. However since then, I haven’t seen these kinds of returns again.
How have your Super Fund performed this year?
How has it performed last year?
What is the average investment return of your Super Fund in recent years?
Do you have any Super Fund that you can recommend?
EDIT:
After read the first post, it seems that I am asking the wrong question.
I should be asking:
- What pre-mixed Investment choice have you selected (eg. Balanced, High growth, Diversify)?
- How much are your Super Fund charging in fees?
Thanks
Long post with no TL;DR - you have been warned.
Based on the number of similar posts I've seen to this lately, I think a lot of people don't understand how superannuation investments really work.
Super isn't some magical investment that has great returns every year - its returns are entirely dependent on what the underlying investments are.
Your underlying investments are (unless you pick otherwise) based on predetermined allocations between AU shares, international shares, property, infrastructure assets, fixed interest (e.g. bonds) and cash. These allocations are chopped and changed to provide you choice depending on how risky you want your investment to be - the more risk, generally the more reward.
Even with the balanced option, you're looking at approximately 60% of investments in volatile asset classes (shares) - e.g. http://www.australiansuper.com/investments-and-performance/s…
Therefore your returns are going to be proportional to how each of these investment classes have performed - pick larger proportions of shares and you'll have great years (like performance since the GFC, up until earlier this year and where the 20% yearly returns come from) and bad years (e.g. the GFC where -20% returns or worse come from). The sharemarket was doing very well since January until about April from memory, and then between April and now has wiped off all the gains since January. That's just how volatile markets are.
Given how shares are volatile - you must expect that returns every year will swing significantly from year to year.
Pick a capital stable/guaranteed asset allocation (virtually all bonds or cash) and you'd be lucky to even keep up with inflation, but at least you won't lose any money.
As someone that audits the financial services industry, I can tell you that for the most part, which superannuation company you are with makes little difference in the long run - all companies have good years and bad years compared to their peers but noone is able to consistently outperform the market as a whole.
Research has consistently shown that professional investment managers are unable to consistenly outperform the "market" (e.g. if they were aiming to beat the returns of the ASX200, virtually none will be able to do it every year for longer than a few years).
And why does this happen? Because they will all hold about the same companies and in similar proportions to each other - in order to beat the market they also need to hold companies in different proportions (or not at all) compared to their competitors - but if their fund starts underperforming others, its quite obvious and investors will switch to another fund in search of better performance. Therefore it is in their interest to perform similarly to others by investing in the same companies. And this often means the fund just ends up having the same composition as the very index it is trying to beat. Not a good path to outperformance, especially when you are charging a fee for the privilege on top.
My own advice (take it with a grain of salt) would be:
1) take an interest in your super - which the OP is doing since they are questioning the performance of their fund - however I think the question may be part misunderstanding of how financial markets work
2) generally, you'll want a higher proportion in shares when you are younger, and slowly decrease this proportion (taking on more stable priced investments such as bonds or cash) as you get older - you can google for some guidelines on this
3) make sure your super is with a fund with low fees - one of the few ways you can really make a difference to your balance (those industry vs retail fund ads you see on TV are right)
4) don't bother with switching back and forth between funds depending on current performance, except to consolidate them all to one fund to minimise fees. As most financial product ads will tell you - PAST RETURNS ARE NOT AN INDICATION OF FUTURE RETURNS -
5) keep in mind legislative risk - super rules change all the time so while its good to have superannuation, don't rely on it being there in its current form and age you can access it staying the same by the time you retire - i.e. have some investments outside of superannuation as well to help diversify away this risk