AustralianSuper looks at how to measure super performance

AustralianSuper looks at how to measure super performance

When it comes to investing there are many ways to measure returns and compare performance. Understanding the differences can help you to make more informed investment choices.

While you might regularly be checking your super balance, getting a more accurate measure of performance requires looking at investment returns. 

A key difference between common return measurements is the treatment of fees and costs you might be charged based on your investment option:

  • ‘Gross investment return’ is the return of an investment before any fees, costs and taxes are deducted.
  • ‘Net investment return’ is the performance of an investment once investment fees and costs, and transaction costs and taxes are deducted, but it doesn’t include admin fees.
  • ‘Net benefit’, or ‘net return’, is the investment return after all fees have been taken out. This includes investment fees and costs, transaction costs, admin fees and taxes. 

When you’re comparing the performance of similar super funds, the net benefit percentage figure allows for equal comparison with other super funds based on a similar account and investment option(s).

Benchmarking performance 

Different types of performance benchmarks can also help you compare performance over the short and long term. 

These include peer benchmarks looking at similar investments, goal-based benchmarks such as a comparison to inflation over time, and market-based benchmarks that compare performance to indexes such as the S&P/ASX 200 Index.

Regulators also benchmark the industry, such as APRA’s annual performance test that assesses super products with a ‘pass’ or ‘fail’ result to address poor fund performance.

Learn more about how to measure super performance at: https://www.australiansuper.com/investments/investment-articles/2021/10/measuring-super-performance