Compare returns before switching funds again
QI have a general super enquiry, but one that very much needs your point of view, please.
Both my husband and I are 53 and have the same super fund provider (Mason Stevens). We have around $200,000 and $400,000 respectively.
We have been with them for five years and the portfolio is split between growth and balanced (given our age), yet it has returned only 2.78% and 1.79% respectively over the past five years – hardly brilliant.
I am reluctant to change funds yet again (we’ve done so about five times over our working life), yet I’m also aware that the returns are poor.
We will be working for at least another 15 years.
Do we bite the bullet yet again and speak to our financial adviser and pay for an analysis of our current provider and for recommendations for our new provider, or do we jump ship and go for a fund like AustralianSuper, Aware Super or the new Vanguard product and do it ourselves?
We don’t want to muck up our future, but we can’t make the wrong decision, either.
Hi Sarah, with a split between balanced and growth funds, I think we can call your overall super as invested in “balanced-plus”. Presumably the returns you quote are per year. It is not fair to your super fund provider for me to comment on these returns, as I have no idea whether insurance costs and so on are coming out the fund and, of course, are impacting on your returns.
So, I think the best thing to do is to look at roughly what would “balancedplus” returns have been over the past five years, but this does not include fees or any insurance contributions. This is pretty rough and ready, but I would expect balanced-plus returns over the past five years to be around minus 5% in 2022, 13% in 2021, 3.5% in 2020, 14.5% in 2019 and about zero in 2018, so a bit over 5% a year. But remember, no fees or super are allowed for in these returns.
What I can say is that pretty much any big super fund does much the same when it comes to investing, so a key for me is the lowest fees possible. Here it is pretty hard to go past the names you mention, such as AustralianSuper and Vanguard. I’d suggest, though, you take a close look at the returns they have generated over a similar five-year timeframe to your current provider, including all costs.