When was the last time you checked your super? How did you choose your super fund? Did you do your research or just go with your employer default or the fund your parents were with?
For many Australians, super will be the largest asset you have outside of your home. Australia’s super assets total $3.1 trillion. This is larger than the entire Australian sharemarket at $2.8 trillion.
How do super funds invest members’ money?
Have you ever thought about where your super is invested? In financial lingo, this is referred to as asset allocation, and surprisingly little has changed since the last global financial crisis (GFC) on how your money is invested.
The majority of super funds in Australia typically default their members into a balanced investment portfolio and most don’t provide the option to control what your super is really invested in. According to recent stats from The Association of Superannuation Funds of Australia, Australia’s super asset classes break down as follows:
- International Listed Shares – 27%
- Australian Listed Shares – 23%
- Australian Fixed Interest (e.g. Bonds) – 11%
- Cash – 10%
- International Fixed Interest (e.g. Bonds) – 8%
- Infrastructure – 6%
- Unlisted Property – 5%
- Unlisted Equity – 4%
- Listed Property – 3%
- Other – 2%
- Hedge Funds – 1%
This breakdown allocates only 50% to the listed shares and does not reflect where asset growth has been in recent years. The average super fund returned an average of 7.9% per annum over the last 30 years to 2019, whereas the Australian sharemarket returned 9.4% and the U.S. share market returned 10.1% comparatively.
For further information please visit the Association of Super Funds Australia website.
Beyond knowing the general asset allocation of your fund, many super funds do not provide members with enough transparency around what your super is actually invested in.
Whose objectives does your super fund fulfil?
Does your super fund’s asset allocation really reflect the best possible outcome for you or is it set up for administrative convenience for your fund?
Of Australia’s $3.1 trillion in super assets, $100 billion of Australians’ money is in underperforming super products and 27% of Australians have more than one super fund account. Underperformance and unnecessary fees can make a difference of hundreds of thousands of dollars in the long term.
Fortunately the government is introducing measures to publicly publish and label default funds that are underperforming. Funds that receive the underperformer label will be required to communicate this fact to their members and direct them to the YourSuper tool.
Take control of your super
Superhero Super offers you the flexibility and freedom to invest your super your way and invest up to 75% of your super directly in ASX 300 shares, ETFs and LICs without a self-managed super fund. Your super is a crucial part of building your financial future which is why we’ve created a platform that puts your super in the palm of your hand.
Take control of your super with Superhero Super.
Please read our Product Disclosure Statement, Additional Information Guide, Investment Guide and Insurance Guide in addition to our Target Market Determination for our Autopilot Account and Control Account for full information regarding Superhero Super. A Target Market Determination (TMD) is a document which describes who a product is appropriate for.
The information on this webpage has been prepared by Superhero Markets Pty Ltd (ABN 36 633 254 261), a Corporate Authorised Representative (CAR No. 1276309) of Sanlam Private Wealth Pty Ltd (ABN 18 136 960 775) (Australian Financial Services Licence (AFSL) No. 337927) and Superhero Securities Limited (ABN 96 160 456 315) (AFSL No. 430150). Superhero Super is issued by Diversa Trustees Limited (ABN 49 006 421 638), (AFSL No 235153), as trustee of OneSuper (ABN 43 905 581 638). Superhero Super is a sub-plan of OneSuper. Superhero Super is a sub-plan of OneSuper.