Best Performing Super Funds. and Bad Financial Advisers

tsandu on 10/07/2023 - 14:05

Hi All, used to be in Australian Retirement Trust (ART)Superfund, and a few years ago, they used to perform pretty good, and also paid out "dividends" or "interests" every year. Their performance dropped as expected (went negative) and stopped paying the "dividends" or "interests". 3 months ago, a financial planner (which i have known for over 10 years - they put in place insurance covers) said i should get out of ART as you dont know where your money is, and even though shows you have $123.. its not correct.. So I took (and paid for) their advice, they moved my money to a Maquarie Superanuation Management fund, where they have invested in 6 ETF's, some bonds, and some cash.. The only catch, it has been going backwards ever since, some days goes up by 4000, anloy for it to go down by 5000 the next day, I cant seem to sell when expensive, and buy when its cheaper, and although i sent 2 emails to the financial adviser, I have received no replies.. So starting to think cut my losses and get rid of them… and move back to ART, or possible Australian super..

However when comparing fund performances.. seems whichever place you go… has different performances for the same super and same investment option.. for example canstar, and rate city, have different performance levels for balanced option in ART.. so which is correct? and why is it different? How can i work out which is best performing fund and which options, for 1 year… for 5 years etc?

I am sick of financial advisors, and don't think i will even bother emailing him again, and just dump him of my super, and insurances.

Thoughts? opinions?

Financial Superannuation

Comments

  • kekw on 10/07/2023 - 14:19
    +8

    bruh is a super not a broker…

  • SBOB on 10/07/2023 - 14:22
    +23

    The only catch, it has been going backwards ever since, some days goes up by 4000, anloy for it to go down by 5000 the next day, I cant seem to sell when expensive, and buy when its cheaper, an

    you're not meant to day trade your super :)

    • tsandu on 10/07/2023 - 14:27
      -4

      is this a superannuation rule? Seems like a good idea to keep it making money.

      • Muzeeb on 10/07/2023 - 14:41
        +1

        How many years until you retire op?

        • tsandu on 10/07/2023 - 14:42

          15ish

          • Muzeeb on 10/07/2023 - 14:44
            +6

            @tsandu: Just chill then. You're in it for the long ride not daily gains.

            • tsandu on 10/07/2023 - 14:47

              @Muzeeb: but since need to change funds anyway.. would like to pick one of the better performing funds.. in 15 years.. the difference between a poor performing fun and a good one can be significant. Tossing if should go back to ART, or go with australian super as an example. How can someone make a calculated decision when all the performance data is all over the place?

              • Muzeeb on 10/07/2023 - 14:49

                @tsandu: Can't help you there. I don't have an accumulation fund.

              • brad1-8tsi on 10/07/2023 - 16:07
                +1

                @tsandu: The old QSuper (now ART) was great for low balance accumulation funds.

                My youngest is in Qsuper/ART and gets great returns (50% International shares/50% Australian shares). After management fees & taxes and employer/concessional contributions her balance has increased 11% which is pretty good for this year.

                Balance will go up and down like a brides nighty if you are aggressively invested. Mine can move up/down $20k daily. You learn to live with it or stop looking.

                To understand if moving to another fund is worthwhile you need to understand both the management fees and the returns of the asset allocation you have nominated in your current fund and how that fits with your "retirement" age (currently 60 to convert to an account based pension after leaving a job.)

                Generally, the commercial super funds are high fees unless you can get a corporate rate.

                I'd suggest you look at UniSuper, Australian Super, Host Plus or Rest and consider a low fee "Indexed Balanced" asset allocation.

          • angywoo on 10/07/2023 - 15:03

            @tsandu: So in 15 years you will be 67?

            • Cheapskate Paul on 10/07/2023 - 16:11
              +5

              @angywoo: 67 is the age you can apply for the age pension. You can access your super from age 60.

              • angywoo on 10/07/2023 - 18:15

                @Cheapskate Paul: Clearly I have no idea what I am speaking about.

                On the + side I now know I can get my super 7 years earlier. Thank you

                • Lastchancetosee on 11/07/2023 - 09:01

                  @angywoo: It's called the age of preservation, and it varies depending on when you were born.

            • brad1-8tsi on 10/07/2023 - 16:13

              @angywoo:

              So in 15 years you will be 67?

              The current retirement age for superannuation purposes is 60. You can leave a job and that counts as "retired" and then start a new job a week later and that entitles you to transfer the money from the accumulation account to an account based pension which pays no tax on earnings or drawdowns.

              You keep the accumulation account open to receive contributions from the new job or to recycle income to reduce tax on death.

              • angywoo on 10/07/2023 - 18:13

                @brad1-8tsi: Thank you I didn't know this.

                Do you know of any places I can get information on self managing my funds?

                • Muzeeb on 10/07/2023 - 21:59
                  +11

                  @angywoo: I like the way you went from admitting you have no idea about superannuation to now wanting to create a SMSF. I admire your initiative.

                  • angywoo on 10/07/2023 - 23:45

                    @Muzeeb: Great observation. HA! I have no idea about either.

                    Always up for a bit of a read though….thought this might be a different genre to consider trying.

                • brad1-8tsi on 11/07/2023 - 14:21
                  +3

                  @angywoo:

                  Do you know of any places I can get information on self managing my funds?

                  Nope. I've always had my money with industry super funds.

                  My understanding of SMSFs is they are good thing if you have lots to invest or you want direct investment in property or other investments not available via traditional super funds.

                  Given the compliance requirements you really need a balance of at least $250k to make it worthwhile.

                  Buy this bundle. It may be a tax deduction for you and you'll definitely learn something.

                  https://www.noelwhittaker.com.au/shop/bundle-of-wisdom/

            • tsandu on 11/07/2023 - 13:36

              @angywoo: yeap

      • SBOB on 10/07/2023 - 15:19
        +3

        Seems like a good idea to keep it making money.

        or lose money
        If you think you can beat the index, then you should be running a SMSF (and likely working in finance already)

  • CrowReally on 10/07/2023 - 14:26
    +14

    If you want to micro-manage your super with watching daily trades and all that, you should probably be doing a SMSF. Third party super management aren't going to turn around transactions on the timeline you expect.

    Having said that, and despite you using the right words, you don't sound financially literate. If you're expecting to find a simple report on what the "best" fund is, you're over simplifying to the point of meaninglessness. Your risk profile, timeline of returns etc are all giant variables in this, which is exactly what the financial advisor is there to help you with.

    If you get rid of your financial advisor I think they'll be just as pleased as you are.

    • tsandu on 10/07/2023 - 14:42
      -1

      i understand there are many things that are taken into consideration, I acknowledge i don't know to much about super funds, however have played around with many other investments.. so does that make me financially illiterate.. not sure.. maybe.

      I don't really care for a "best" fund.. where you may consider insurances, and other benefits in the fund.. I am just after best performing fund.. For example if I had 100k in the fund/option… which one in the past year performed the best, or in past 5 years.. i would think this info should be easy to find, but apparently not

      As an example.
      in canstar : AustralianSuper | Balanced 1yr = 3.7% 5 yr=6.6%
      in ratecity : AustralianSuper | Balanced 1yr = 7.68% 5yr=7.07%

      both for same amount selected..
      So which one is right? and if such a discrepancy for the same fund.. how meaningful is comparing to other funds..

      • CrowReally on 10/07/2023 - 14:50
        +3

        Why don't you ask canstar and ratecity? Or would you rather I, a complete stranger on the internet, guess what they were thinking/how they did things?

        If so, the coin landed heads, so canstar has the correct analysis.

      • Gdsamp on 10/07/2023 - 15:10
        +3

        From AustralianSuper's own performance page
        Balanced:
        1yr = 8.22%
        3 yr = 8.23%
        5 yr = 6.72%
        10 yr = 8.6%

        you can use the different boxes to compare between their different investment options. Most super funds will have a similar page. Why not just use the numbers reported by the company rather than thru a third party? It's more likely to be up to date.

        Remember that super is a long term investment. You have stated that you have a timeline of ~15 years to retirement. It may be worth considering to stick to a 'balanced' option instead of high growth, given that we usually have some sort of market correction every 10 or so years (due to irresponsible behaviour by big banks, virus leak from lab etc).

        Another observation is that you should probably not try to time the market, nor day trade your super portfolio. Given the difficulties you have faced obtaining basic performance information, I would implore OP to take a more set-and-forget approach. the fund managers have spent a lifetime accruing investment experience and dedicate their working days to it. They are likely to know more than you and I about these sorts of things.

        Remember that past performance is not a guarantee or prediction of future performance.

        General advice only. It does not take your specific needs or circumstances into consideration, so you should look at your own financial position, objectives and requirements and seek financial advice before making any financial decisions.

      • JMosk on 10/07/2023 - 15:28

        It could be that one is taking into account fees and the other is not. Does it specify anywhere?

        You need to be comparing like for like in terms of timeline, investment option and fees

      • jv on 10/07/2023 - 15:51
        +1

        I acknowledge i don't know to much about super funds

        Then speak to your accountant….

      • brad1-8tsi on 10/07/2023 - 16:22

        As an example.
        in canstar : AustralianSuper | Balanced 1yr = 3.7% 5 yr=6.6%
        in ratecity : AustralianSuper | Balanced 1yr = 7.68% 5yr=7.07%

        It doesn't matter that they are different as they probably use different methodology (read the fineprint). What matters is they use the same consistent methodology for all funds so they can be compared equally.

        Aus Super Balanced returned about 5% for the FY just finished. Indexed Diversified was about 5.5%.

      • BigBirdy on 11/07/2023 - 08:15

        Without specifically looking at these ratings, some places quote performance based on the fund's overall investment returns, and some quote based on the performance of an account with a particular balance. In the latter case, it's typically $50,000 which is a relatively small balance and likely more significantly affected by fees (& possibly even insurance).

  • 87percent on 10/07/2023 - 14:58
    +1

    https://www.realestate.com.au/news/retail-worker-has-7-homes…

    Are you trying to emulate this guy?

    and all the "…" in your post makes it very hard to read

    • tsandu on 10/07/2023 - 15:03

      hahah i wish…. but if you have the chance why not

    • Muzeeb on 10/07/2023 - 15:52
      +1

      and all the "…" in your post

      Mamma Mia might be OPs favourite movie of all time?

    • Ultimate Gattai on 12/07/2023 - 00:49

      It tends to be foreigners or people who have English as a secondary language that use a lot of ellipses, I don't understand the mentality behind it since it indicates that you take a very long pause each time when you read it.

  • peter05 on 10/07/2023 - 15:03
    +9

    your "financial advisor" got a fat commission and that's all they're interested in.

    Their caveat that you ultimately make the decision is their get out of jail free card

    You went from a low fee industry superfund to a bank-owned for profit superfund. In addition you may have been placed in a "higher risk" product.

    Noone on these forums can answer or understand your personal circumstances

    Literally every page you get those rates from, there will be a caveat that past performance is not a guarantee or predictor of future performance

    • saver el cid on 10/07/2023 - 15:36

      Except commissions in super are illegal

      • peter05 on 10/07/2023 - 15:37
        +1

        yeah sure potato potato, call it whatever you want, there was money changing hands based upon a client wandering innocently into the bear trap

      • bobbified on 10/07/2023 - 22:34
        +1

        You think people work for free?

        • CrowReally on 11/07/2023 - 09:30

          From OP

          So I took (and paid for) their advice

        • peter05 on 11/07/2023 - 09:38
          +1

          there has been no statement or expectation that people work for free.

          OP has already specifically mentioned they PAID for the advice.

          Outside of that, there are sweetheart deals to sway customers to the product that will ultimately net the advisor/business more money.

          It's always best to approach the advice provided by financial advisors with wariness and compare a few advisors and strategies, if only to get a good overview of what a "balanced" portfolio may look like to the average advisor.

          It's been shown that your typical mutual fund management that charges significantly higher fees on top of industry superfunds that they do not correlate with better outcomes. Good luck having a 1-1 with your manager as well, only when you submit the transfer form do they try and return your calls. They're all after that passive income "managing" your portfolio.

          • Terbo on 13/07/2023 - 16:50
            +1

            @peter05: You obviously have experienced some pain in the past or have a long held belief that continues without recent evidence.
            Just for fun I did a quick comparison of ART Balanced (default option) VS Macquarie Super Consolidator with a few random ETFs, Bonds and Cash for $250K with a 70/30 split.
            ART costs $2187 pa while Macq costs $1666 pa, so ~$520 cheaper (due to ETF low costs), with specific asset allocation and tax within a wrap rather than an all in one approach from a pooled fund = a more personalised investment with full transparency, unlike ART.
            I think ART are good and can certainly be much cheaper if you also select from their (limited) specific Index funds. I didnt back test ART V Macq selection but ASX200, S&P 500 and Cash are the same results for both, the 'unlisted and private' investments the big ISFs make are the only real difference and sometimes a mystery in value, unfortunately all of their investments are a 'black box' which is what the adviser may have been referring to re you dont know where your money is.
            As for the OP, chasing last year's winners without actually considering what your specific account is invested in isnt going to get you very far. Most unaware Aussies are in their Super fund's default fund and do ok as a result, dont be a victim of the Dunning-Kruger effect.

            • peter05 on 13/07/2023 - 17:47

              @Terbo: you're absolutely right and I honestly haven't revisited after Sunsuper were merged into ART. I am holding off lifting that rock as I have had reservations. I am aware that there are cheaper options also, as after the merge their fees did increase marginally compared to before. Depending on the balance the fee structure can certainly favour one fund over another. For example you have selected 250k, but for those that are younger, that $22/month administration fee from Macquarie is eye watering compared to the circa $5 from ART

              It is a general statement regarding the industry superfund vs managed fund and I am certainly open to being shown different.

              How do the insurance premiums compare? I haven't found an easy way to be able to weigh up the costs/offerings across funds and that can be a significant part of the "costs" when considering the whole package. I presume the values you presented above don't include the insurance premiums (if one chooses to take them out)

              • Terbo on 14/07/2023 - 13:04

                @peter05:

                1. Most ISF members are in the 'default fund' eg ~90% so thats where they focus performance attention to smooth returns and also where they charge the highest price eg 0.8 - 1.1% once you look at all their underlying fees that they dont always add into their headline fee rate (see PDS for more info). One reason for greater consolidation in this space is it costs real money to run a big fund and there is also now fee transparency and performance monitoring, many of the smaller ISF have had sub par returns and higher fees and are getting out.

                2. There are many retail Super funds that can beat the 0.8% admin/investment fee number, especially if you use a blend of index funds or ETFs for core investments like ASX 200, try CFS Firstchoice for newbies, AMP North, BT Panorama, Macq for a range of both master trusts and wraps. Aust Super does a member direct option that gives ASX access and works like a wrap, probably ~$700 cheaper on $500K than retail but the admin and service is atrocious, not worth the saving if you value your sanity. Retail also do reduced fees for scale or family fee discounts. But fees alone arent as important as net return, paying a bit more to get more or have a nicer experience can be worthwhile.

                3. Retail insurance (Life & TPD) has been cheaper than group cover through ISF for some time now for many occupations, sex, older people, also gives scale discounts, tax rebates, better definitions and thats even with commissions included. This is due to rising insurance costs, less competition, greater claims, older client base and the removal of auto cover for under 25s, which was money for jam. Though IP is still generally cheaper with ISF and since APRA restricted new policy benefits for retail, group insurance terms and benefits can even be better, although the policies are not guaranteed. The contracts get reviewed every 3 years and super funds care about lower costs and making money from the deal, not better insurance - 'non profit' doesnt mean no profit. As for trying to make a claim, its a very mixed bag.

            • mrtin on 15/07/2023 - 08:22

              @Terbo: Thank you for your sensible mature response.
              This is just one of the services a financial adviser can do for customers and there are plenty more.

  • w0mbat on 10/07/2023 - 15:11

    https://www.australiansuper.com/investments/investment-artic…

    Shows their figures for all the investment options, which you can choose the % of your exposure to.
    Fees and charges are what they are.
    I suggest set and forget and review 6 monthly, but it's about letting time work on your investments, not trading IMO.

    And remember, past returns are not indicators of future performance.

  • KaTst3R on 10/07/2023 - 15:14
    +4

    i should get out of ART as you dont know where your money is, and even though shows you have $123.. its not correct

    Your account balance is not what it is physically? What rubbish. ART is one of the biggest funds around and regulated by APRA.

    • Daniel Plainview on 10/07/2023 - 21:48
      +3

      I strongly suspect his issue flagged here is one common to all funds that use pooled funds for their members - that being that the balance shown is not correct at the time you view it, as it takes them several business days after you see it to fully calculate the unit values. So they give an estimate but it's ironed down later.

      On a tangent here's a very good article that explains a few little known aspects of these incredibly common investment classes, that I reckon 90% of Australians are in but know very little about:
      https://passiveinvestingaustralia.com/the-problem-with-poole…

  • saver el cid on 10/07/2023 - 15:39
    +1

    OP, if you want control have a look at the Industry Super direct products (e.g. Hostplus choiceplus). Not as good as retail funds, but cheaper.

    If you want to avoid market ups and downs have a look at private equity and alternative options offered by Retail funds.

    DYOR

  • YRT on 10/07/2023 - 17:48
    +2

    For commercial super funds, 'past performance isn't an indicator of future performance' is how I see them, so I run a SMSF.

    However, if I'm not mistaken, commercial super funds can have some degree of creative accounting; as a member it's possible to benefit from this - you just need to study their products well and know when to pull out. This is easier said than done

    An example is when commercial building being valued unrealistically high for on-paper gain. When sharemarket is shit they'll have an incentive to do this; to avoid looking bad and risk capital outflow.

    Happy to be corrected.

    • Daniel Plainview on 10/07/2023 - 21:44

      Super funds pull all kinds of shenanigans - heck their pricing of their internal units is so opaque you struggle to know what they're doing with your money.

      I've recently moved to an SMSF as well - if you're smart you can invest in assets that pay low dividends at rely on capital growth then pay ZERO tax on the entire lifetime of this (yes thats correct you could avoid 40yrs+ of CGT) when your preservation age is met and the SMSF transitions the unsold assets held into a 'pension' fund.

      Super funds can't do this and its why in your final year with them you lose a HUGE CGT bill when they fail to tell you about this downside to their pooled fund products.

      My advise to the OP is to self educate - this is a terrific site and I highly recommend it - written by a regular Australian and is very easy to understand with no BS: https://passiveinvestingaustralia.com/

      FWIW it's pretty normal to have big daily swings as your balance grows so its more about the % of overall change - but this is likely indicative that its in some aggressive products, so if this is a problem perhaps lessen your weighting of these and add a diversifying basic bond ETF like IAF or VAF. They've had a bad 10yr run but will come in very handy when the market correction comes as many people have gotten fooled into carrying 100% equities, which is historically pretty unprecedented investor behavior.

      • blueyez on 16/07/2023 - 14:05

        People who turn 60 and use a pension fund don't pay tax on the returns, regardless of super fund used.

        • Daniel Plainview on 16/07/2023 - 19:29
          -1

          What is this Super 101 - yes, thanks for stating the incredibly obvious and your point is???

          I can only deduce that you can't grasp my point & that of the article - which is if you're in a pooled fund, you are taxed for the CGT even when it's unrealised on the assets - as thats the way it works in pooled fund setups. They're very tax inefficient.

          If the assets are held directly - and you're extra smart selecting assets which have minimal dividends & all returns placed into capital growth (like for example Berkshire Hathaway shares), you hold these through accumulation and then with many, many years capital gains accrued change the account/assets to a pension account and POOF - all the capital gain accumulated over many years is gone, without you having to pay a single cent on it.

          Try doing that with a pooled fund in a major super fund.

    • tsandu on 11/07/2023 - 11:01

      I am starting to think starting my own smsf, and invest in property, where i have substantial knowledge.. Looking more into setting up a smsf and yearly costs for accounting and reviews.

  • chami on 11/07/2023 - 09:03

    HostPlus - index balanced (not balanced) to May 2023 return: 10.8%.
    Their Balanced: 6.87%.
    I think their 'unlisted part under-performed; Their International shares returned 17.08%!!

    SMSF - I also run an SMSF mainly using ETF/LIC returned 11.41% in 2022/23.
    A lot of work and usually underperform the HPindex balanced and balance. I use Esuperfund for admin.. ($1100 a year).

    The difference in returns mentioned may be because the pension/accumulation phase. The former pays no tax on profits.
    You can see the difference using:
    https://hostplus.com.au/members/our-products-and-services/in…

  • BeamMeUp on 11/07/2023 - 09:17

    If you’re considering Australian Super check out their Customer reviews first. Considering their performance is generally good their reviews on Customer service make interesting reading.

    • YRT on 11/07/2023 - 11:56

      Agreed. They made it very difficult to port out to SMSF. I ended up going AFCA just to take my money out

      They are the worst company I have dealt with, in my 18 years in this country. Stay well away

  • Daniel Plainview on 11/07/2023 - 13:08
    +2

    One of the biggest mistakes investors make is evaluating their investment decisions SOLELY via the end results (and generally the very short term ones). i.e it made 18% in last 12mths so was a brilliant investment decision.

    It's like driving home drunk, if you make it safely that doesn't mean its a good idea. You just got lucky doing a stupid thing.

    This is terrible practice and one of the reasons why folks end up seesawing their results changing their plans over and over - much better off IMHO doing much more research and getting soemthing you can stick to long term - ideally this will have some flexibility built into it so you're not reinventing the wheel if you make any changes.

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