How to Choose a Super Fund in Australia

💡 Here’s a truth that surprises most people under 30: your super fees will likely have a bigger impact on your retirement balance than fund performance.

Let that sink in.

Over 35+ years, a 1% difference in fees can cost you tens of thousands of dollars. Meanwhile, this year’s top-performing fund might be next year’s laggard.

⚠️ Why Last Year’s Winner Isn’t the Best Choice

Funds that outperform one year often underperform the next. Why?

• 📈 Money floods into winning funds
• 📉 Fund managers struggle to deploy capital at the same returns
• 🔄 Mean reversion kicks in

⚠️ Chasing performance is a losing strategy. What you can control is fees.

🔍 Check for “Fat Cat” Funds

Before anything else, check if your fund is on the Stockspot Fat Cat Funds list. If it’s got a “fat” rating, get out.

Finder’s super comparison shows annual fees for a $50,000 balance — a good benchmark.

🎯 My Default Recommendation

For 95% of Australians who don’t want to think about super:

Hostplus Indexed Balanced Fund — 0.05% annual fee

That’s one of the lowest in Australia. Set it and forget it.

⚖️ Adjusting Risk as You Age

Every 5 years or so, review your investment mix. The general principle: shift from growth to defensive as you approach retirement.

Age	Growth Assets	Defensive Assets
20s	90%	10%
30s	80%	20%
40s	70%	30%
50s	60%	40%
60+	40-50%	50-60%

Growth assets = shares, property. Defensive = bonds, cash, fixed income.

🧘 Don’t Tinker Too Much

Here’s the counterintuitive advice: check your super once a year, not once a week.

Being too eager with your investments leads to:

• 😱 Panic selling during downturns
• 📈 Buying high after rallies
• 💸 Racking up unnecessary fees

Set a calendar reminder. Review annually. Adjust if needed. Move on.

📈 What About Picking Individual Shares?

Once you’re comfortable with investing concepts and understand the risks, you might consider investing in individual shares through a self-managed super fund (SMSF) or a super fund with direct investment options.

But that’s a topic for another post.

🏁 The Takeaway

1. 💰 Fees matter more than performance for young investors
2. ⚠️ Avoid fat cat funds — check the lists
3. ✅ Low-cost index funds are good enough for most people
4. 🔄 Adjust your allocation every 5 years
5. 🧘 Don’t tinker — review annually, not daily

Related guides:

• Superannuation tax deductions
• Basic portfolio management
• Essential personal finance skills

Your future self will thank you for making these decisions now.