Research: performance not always tied to size of super fund

Research undertaken by Frontier Advisors found that the asset allocation was more important to investment performance than the size and scale of a superannuation fund. Last financial year, smaller funds did very well, with size not a definitive predictor of performance.

Though, when we get to the lower end of funds under management, size does matter - the worst performers had less than $5 billion in assets. The question remains: is a fund large because it performs well, or does the fund perform well because it is large?

The Australian Prudential Regulation Authority (APRA) revealed that in the top 10 funds by performance, seven of those had less than $30 billion in assets, with five of those having under $15 billion. Most funds were in the red for the year (median return of -3.0 per cent), while a couple of smaller funds remained in the black.

Generally, funds with a greater percentage of unlisted assets in infrastructure, property and private equity did better. AustralianSuper and HESTA have outperformed the median fund every financial year, offering members consistent results, which seems to be a more useful metric according to the report.

Download the full Superannuation Performance 2020-21 report (PDF)