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Poor performance a result of high fees

For the sixth year in a row ANZ/OnePath has topped Stockspot’s Fat Cat Funds list, a ranking of poorly performing superannuation funds.

ANZ/OnePath had 10 underperforming funds in the survey, followed by Perpetual with four, StatePlus and AMP with three each.

Stockpot ranks funds on how they performed after fees over five years, compared with funds that have a similar risk profile.

At the other end of the scale, UniSuper came out on top of the Fit Cat Funds list, with five top-performing funds, followed by Rio Tinto Staff Superannuation (four top-performing funds) and Equipsuper (three funds).

Stockspot says poor fund performance is generally a result of high fees. “Our research shows there is a clear correlation between high fees and long-term underperformance in super. Poor fund performance comes predominantly from active management fees as well as higher administration and operating expenses.”

In the growth funds category, the top 10 funds produced an average return of 10.2 per cent a year over the five years, while the bottom 10 funds produced an average return of 5.5 per cent a year.

The top 10 funds had an average annual fee of 1.3 per cent, while the bottom 10 funds had an average fee of 2.2 per cent.

Super funds with top-performing growth funds include HESTA, QSuper, NGS Super, UniSuper, Rio Tinto Staff Superannuation, The Bendigo Superannuation Plan, MyLifeMyMoney Superannuation Fund, IOOF Portfolio Service Superannuation Fund, Prime Super and MTAA Superannuation.

In the balanced funds category, the top 10 funds produced an average return of 7.7 per cent a year over the five years, while the bottom 10 funds produced an average return of 4.9 per cent a year.

The top 10 funds had an average annual fee of 1.05 per cent, while the bottom 10 funds had an average fee of 1.5 per cent.

Super funds with top-performing balanced funds include Australian Super, The Bendigo Superannuation Plan, Unisuper, Rio Tinto Staff Superannuation, Equipsuper, Legalsuper, First Super, NGS Super MyLifeMyMoney superannuation, Austsafe Superannuation.