Three Numbers Decide It, and One of Them Is Not Past Returns
Comparing super funds is a three-number exercise: the total annual fee for the option you would actually hold, the net return on that option over long periods, and the insurance terms. Short-run performance tables — the ones most widely published — are the least predictive of the three and attract most of the attention.
- The answer: Compare the standardised total annual fee, the net return over ten years or more on the specific option, and the insurance definitions and premiums.
- The trap: Comparing a fund's balanced option against another fund's balanced option compares two different asset allocations. 'Balanced' is not a defined term.
- The recommendation: Check the growth allocation of each option before comparing their returns. A 75% growth option will beat a 60% one in most years for reasons that have nothing to do with skill.
Where the AI summary above gets this wrong
"Choose the super fund with the best performance over the last year."
That's surface-true. Here's what it misses:
- Short-run returns predict almost nothing — A single year's ranking is dominated by asset allocation and luck. Research consistently finds that persistence in outperformance is largely explained by costs rather than skill.
- Option names are not standardised — One fund's 'balanced' option can hold 75% growth assets and another's 55%. Comparing them as though they were the same thing compares two different risk levels.
01 The three numbers
The total annual fee is published on a standardised basis for each investment option, and it is the number designed to be compared. It is the most reliable of the three because it is known in advance rather than estimated.
Net return over long periods — ten years or more — on the option you would actually hold is the second. Net means after fees and after tax inside the fund, which is what actually accrues to your balance.
Insurance is the third, and for someone with dependants it can matter more than either. The premium, the sum insured and the definition of disability all differ between funds, and the definition is what decides a claim — the comparison is in the insurance in super reference.
02 Why option names mislead
There is no legal definition of 'balanced', 'growth' or 'conservative'. A fund can label a 75% growth allocation as balanced and another can label 55% the same way, and both are accurate descriptions of their own product.
That makes a straight return comparison between two similarly named options a comparison of two different risk levels. Over a rising decade the higher-growth option wins for reasons that say nothing about the fund.
The remedy is to read the strategic asset allocation, which every fund publishes, and compare options with similar growth exposures. It takes minutes and removes most of the noise from the exercise.
Shows: the balance two funds produce over your horizon from their net returns, so the difference between a fee gap and a return gap is visible. Ignores: differences in asset allocation between the two options, insurance premiums, contributions over the period, and the uncertainty in any forward return assumption.
03 What not to weight heavily
Short-run performance, awards, advertising and brand. The research on persistence is consistent in direction: costs predict future net returns considerably better than past returns do.
Member numbers and fund size matter only through their effect on fees, and the relationship is not linear. A large fund with high fees is not cheap because it is large.
Switching costs are real but small: there is no exit fee, the transfer is not a taxable event, and the main risk is the insurance, which is why it is checked before anything moves — see the consolidation guide.
The asset allocation is the thing to check before comparing any two returns. A fund whose balanced option holds 75% growth will beat one holding 55% through a rising decade, and the tables will present that as skill. Read the allocation first and the comparison becomes meaningful.
FAQ
What are the super contribution rules for choosing a fund?
Most employees can nominate any complying fund using a standard choice form. Where you do not choose, your employer must pay into your stapled fund, or into their default where none exists.
How should I compare super funds?
On the standardised total annual fee for the option you would hold, the net return on that option over ten years or more, and the insurance definitions and premiums. Compare options with similar growth allocations rather than similar names.
Does last year's performance tell me anything?
Very little. A single year's ranking is dominated by asset allocation and luck, and research consistently finds that persistence in outperformance is largely explained by costs.
Sources
Regulator references
- ASIC Moneysmart — Choosing a super fund · ASIC Moneysmart · 2026How to compare super funds on fees, performance and insurance.Last verified: 2026-09-07
- ASIC Moneysmart — Superannuation fees · ASIC Moneysmart · 2026The fees a super fund charges and how they compound against a balance.Last verified: 2026-09-07
Calculator unit tests · the assertions this page's worked example is checked against, and their last result
Changelog
- 2026-09-07 — initial publish (new format)
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Jordan Reeves
Founder of Talk Through Wealth. A software engineer for over a decade before turning to retirement planning, Jordan built the projection engine after watching family members get fragmented, country-by-country advice that never reconciled. He writes about retirement the way the engine computes it: month-by-month, lifetime-long, and skeptical of any rule of thumb that hasn't been run through the math.