Superannuation: Judging your fund's performance - Australian Securities and Investments Commission

Judging a fund's investment performance

Your fund's investment performance usually makes a big difference to how much you will have to retire on.

No-one can reliably pick which fund will perform best. It's far more reliable to pick the right investment strategy and fund features with low fees, and take the ups and downs of investment performance in your stride.

Four tips for judging performance

1	Look for a reasonable performance It's a waste of time trying to pick next year's top performer.
2	Judge performance over at least 5 years Super is a long-term investment, and short-term figures, such as the last 12 months or less, are all but useless.
3	Compare like with like If a fund has 70-80% of its money in shares and property, compare it only with other similar funds, not funds with 60-70% of their money in cash and fixed interest. Higher fees do not guarantee you higher returns.
4	Try to use the same start and finish dates for each fund Five-year performance from June to June will differ from January to January.

Long term performance figures
Read our table of 5 and 10 year average performance figures for different investment strategies.

Few funds beat the long-term averages, and it's really guesswork trying to pick the few that will. If your fund performed worse than average over a 5-year period, then you may want to consider changing. See changing funds.

Past performance is no guarantee of future returns. Today's top-performing funds tend to fall back to the average over time. However, consistently poor performance can prove hard to turn around.

Research companies rate super funds and often publish their ratings in newspapers and websites.

More information about superannuation

FIDO Website: Printed 10/08/2008