Question
What is the best super fund?
Interesting Question? 
(5) 
(6)
(5) (6)
Answers (1)
10th Nov 2009 by Tobias John Sterling
With hundreds of super funds to choose from, how does anyone work out which one is the best? Let's take a look at some of the considerations:
1) Fund performance. Of course everyone wants to be in the super fund that makes the best (or the luckiest) investment decisions and hence garners the best long-term return for its members. But it's impossible to predict which super fund is going to perform the best, as past performance is not a reliable indicator of future performance (if it was, then choosing a super fund would be easy).
2) Fees. All else being equal, a super account with a fund that has lower fees will always do better. This is why many experts say industry funds are the best, as they do not pay commissions to financial advisers and are not run for profit, and so they are able to offer lower fees than retail funds.
3) Insurance. It's very common for super fund to bundle life and TPD (total and permanent disability) insurance together with fund membership. However, super funds can differ on the cost and quality of this cover. If you have dependents and want this type of insurance, you should thoroughly research and compare the insurance offered by the funds you're thinking of selecting.
4) Control. Most super funds will let you select your desired level of exposure to risk by choosing an 'investment strategy' for your account. For example, there might be a 'growth' option, a 'balanced' option, and an 'aggressive' option. This will determine what asset class allocation you have -- what percentage of your money in shares vs. fixed interest and so on. For ultimate control however, you can set up a self-manged super fund where you make all of the investment decisions yourself.
With hundreds of super funds to choose from, how does anyone work out which one is the best? Let's take a look at some of the considerations:
1) Fund performance. Of course everyone wants to be in the super fund that makes the best (or the luckiest) investment decisions and hence garners the best long-term return for its members. But it's impossible to predict which super fund is going to perform the best, as past performance is not a reliable indicator of future performance (if it was, then choosing a super fund would be easy).
2) Fees. All else being equal, a super account with a fund that has lower fees will always do better. This is why many experts say industry funds are the best, as they do not pay commissions to financial advisers and are not run for profit, and so they are able to offer lower fees than retail funds.
3) Insurance. It's very common for super fund to bundle life and TPD (total and permanent disability) insurance together with fund membership. However, super funds can differ on the cost and quality of this cover. If you have dependents and want this type of insurance, you should thoroughly research and compare the insurance offered by the funds you're thinking of selecting.
4) Control. Most super funds will let you select your desired level of exposure to risk by choosing an 'investment strategy' for your account. For example, there might be a 'growth' option, a 'balanced' option, and an 'aggressive' option. This will determine what asset class allocation you have -- what percentage of your money in shares vs. fixed interest and so on. For ultimate control however, you can set up a self-manged super fund where you make all of the investment decisions yourself.
Like This Answer? (0) (0)
This answer is the subjective opinion of the writer and not of FinancialAdvisory.com
(0) (0)
22nd Oct 2009 In Retirement
1 Answers | 174 Views