By Paul Feeney, Founder and Chief Executive Officer, Otivo
Every year, a round of headlines announces which super funds performed best. Every year, a large number of Australians read those tables, find their fund near the top, and conclude their super is doing well. Quite often the table has not measured their super at all. Performance is an attribute of the investment option you are in, not of the fund whose name is on your statement — and the tables almost always measure one particular option. Here's what a performance figure is actually reporting, and the four things it needs attached to it before it tells you anything.
Super fund performance is the investment return earned by a specific investment option over a defined period, after investment fees and tax. It is measured at the option level, not the fund level. Published league tables usually report the fund's default MySuper option, which may not be the option an individual member is invested in.
What is a super performance figure actually reporting?
Four things have to be true of a performance number before it means anything. Call it the four-part test.
- It relates to one option. A fund runs many options with different asset mixes. The figure applies to the option that was measured and to nobody invested elsewhere on the menu.
- It covers a stated period. A one-year figure describes the market conditions of that year. Longer periods describe the option.
- It is net or it is gross. A net return has already had investment fees and tax deducted, so it reflects what reached member accounts. A gross return has not. The two are not comparable and the distinction is not always obvious from a headline.
- It has a comparison group. A return only means something against options with a similar asset mix. Comparing an option holding mostly growth assets against one holding mostly defensive assets tells you about the asset mix, not the management.
Strip any one of those away and the number stops being informative. Most media coverage supplies the first three and leaves the fourth to the reader.
Why does the option matter more than the fund?
Because the option determines the asset mix, and the asset mix drives the great majority of the outcome.
The fund is the trustee and administrator. It sets the menu, negotiates the investment management and runs the account. The option is the portfolio you chose, or the one you were placed in by default. Two members of the same fund, contributing the same amount, can have very different balances at 60 purely because they sit in different options.
This is why "my fund is a top performer" is a sentence with a piece missing. The useful version names the option: which one, over what period, measured net, against what.
Why is a five-year figure more useful than a one-year figure?
Because a single year mostly reports the weather.
Investment markets move in cycles that do not align with financial years. An option heavily weighted to shares will look excellent in a strong year for shares and poor in a weak one, without anything having changed about how it is managed. Reading that single year as a verdict on the option means reacting to conditions rather than to the option itself.
Longer periods smooth this out and let you see whether an option has done what it set out to do across a range of conditions. Five years is the shortest period generally worth taking seriously, and ten is better. This matters more the further you are from retirement: a 34-year-old is choosing a setting that has to survive several complete market cycles, so how an option behaved in one of them is more informative than how it behaved last June.
Past performance is not a reliable indicator of future performance. What longer-term figures tell you is something about consistency and about how an option behaves when conditions are unfavourable, which is different from a prediction.
Where do fees fit in?
Fees are deducted whether markets rise or fall, which makes them the most predictable element of a super outcome.
A net return figure already accounts for investment fees and tax at the option level. It does not necessarily include administration fees charged at the account level, which vary between funds and are often a fixed dollar amount plus a percentage. That is why comparing net investment returns alone can miss a real difference in what actually lands in the account.
The practical point is that fees and returns need to be read together. An option's fees are published in the fund's product disclosure statement and its fee and cost summary, alongside the return figures.
What is APRA's performance test?
APRA's annual performance test runs on superannuation products, assessing investment performance against a benchmark tailored to the product's own asset allocation, with fees taken into account.
It is more useful than a league table for one specific reason: it compares each product against a benchmark built from that product's own asset mix, which addresses the fourth part of the test above. Products that fail must notify their members, and products that fail in consecutive years can be closed to new members.
APRA also publishes quarterly superannuation statistics, and ASIC's MoneySmart maintains a comparison tool. Between them they are more reliable ground than any published ranking.
What can you do with a performance figure once you have one?
Use it to check whether your option is doing what it is supposed to do, rather than to chase whatever was highest last year.
Otivo's super investment options module compares the options available inside your existing fund using your age, your current option, its five-year history and the fees it charges. That comparison happens within the fund you already have — no fund switching, no product comparison, no forms.
For a 46-year-old who was defaulted into an option in her twenties and has never looked at it since, the useful question is not whether some other fund had a good year. It is whether the option she is in still matches the timeframe she has left, and what the alternatives on her own fund's menu look like on the same measures.
Frequently asked questions
Does the best-performing super fund exist?
Not as a single answer. Performance is measured at option level over a chosen period against a comparison group, so the leader changes depending on which option, which period and which comparison you use. Rankings published for one year rarely hold for the next.
What is a net return in super?
A net return is the investment return after investment fees and tax have been deducted. It reflects what was credited to member accounts, which is why it is the figure worth comparing. Gross returns are quoted before those deductions and will always look larger.
Is past performance a guide to future returns?
No. Past performance is not a reliable indicator of future performance, and all investments including superannuation carry risk. Longer-term figures are useful for understanding how an option has behaved across different conditions rather than for predicting what it will do.
How often is super fund performance updated?
Funds typically publish returns monthly or quarterly and report annual figures after 30 June. APRA publishes quarterly superannuation statistics and runs its performance test annually.
A performance number without an option name, a period, a net-or-gross flag and a comparison group is trivia. With all four attached, it is genuinely useful. Otivo is a licensed digital advice provider holding AFSL and Australian Credit Licence No. 485665, and our super investment options module puts those measures side by side for the options inside your existing fund.
Sources
- APRA, annual superannuation performance test.
- APRA, quarterly superannuation statistics.
- ASIC MoneySmart, compare super funds.
Disclaimer
The information in this communication is current as at August 2026 and has been prepared by Otivo Pty Ltd ABN 47 602 457 732, AFSL and Australian Credit Licence No. 485665. This content is general information only and has been prepared without taking into account your objectives, financial situation or needs. It is not personal financial or taxation advice and should not be relied on as such. Before acting on any information, you should consider its appropriateness having regard to your personal circumstances. This material must not be reproduced in whole or in part, or posted on any social media platform, without the prior written consent of Otivo Pty Ltd.