95% of MySuper funds end 2021-22 financial year in the red, raising concerns for retirement savings

May 08 13:32 2023
Hostplus emerged as the best-performing MySuper fund in Australia with a modest 1.6% return to its members’ balanced fund, while 95% of the funds ended the year in the red, sparking concern and debate among industry insiders.

As the 2021-22 financial year comes to a close, the performance of MySuper funds in Australia has been a cause of concern for many. According to recent reports, around 95 percent of these default options, which hold the retirement savings of 14 million Australians, ended the year in the red. Even the top performers of the year couldn’t escape this trend.

One remarkable performance, nevertheless, was able to defy the general tendency and offer its members positive returns. With a modest 1.6 percent return to its members’ balanced fund, Hostplus, a well-known superannuation fund, came out on top in the rankings. The performance of the other funds was so dismal that it has generated debate among industry insiders. This is a sharp contrast.

The reason for this underperformance can be attributed to a range of factors, including the impact of the pandemic, volatile markets, and changing investment strategies. While some funds have been hit harder than others, it’s clear that most MySuper options have struggled to deliver returns that are even close to their targets.

Hostplus has managed to give its subscribers modest returns despite this discouraging tendency. Due to the fund’s emphasis on the hospitality and tourism sectors, which have been severely impacted by the pandemic, many Australians have chosen it as their investment of choice. The success of Hostplus has been attributed to its aptitude for navigating choppy market conditions and seizing chances in various industries.

“Hostplus has always been committed to delivering value to its members and we are pleased to have achieved positive returns for the 2021-22 financial year,” said David Elia, CEO of Hostplus. “We understand that these are challenging times, and we will continue to work hard to ensure that our members’ retirement savings are protected and growing.”

Even while Hostplus may have won the competition, MySuper funds have underperformed when compared to other investing options. The market summaries for some of the most well-known technological companies in the globe make this clear.

Apple Inc, for example, has seen an impressive year to date growth of 31.94 percent, with its stock price currently at 165.02 USD. Netflix Inc has also seen a growth of 11.20 percent, with its stock price at 327.98 USD. Meta Platforms Inc, formerly known as Facebook, has seen a growth of 13.85 percent, with its stock price at 212.89 USD.

These growth rates are significantly higher than what most MySuper funds have been able to achieve. While it’s important to note that investing in individual stocks is riskier than investing in superannuation funds, the underperformance of MySuper options is concerning, especially for those who rely on these funds for their retirement.

It’s clear that the superannuation industry needs to take a closer look at their investment strategies and identify areas for improvement. This will not only help them deliver better returns to their members but also ensure that Australians are adequately prepared for their retirement.

Additionally, it’s worth noting the performance of other superannuation funds in Australia. According to recent reports, AustralianSuper Balanced had a past 5-year return of 6.67% p.a., CareSuper Balanced had a past 5-year return of 6.19% p.a., Australian Ethical Super – Balanced Balanced had a past 5-year return of 6.07% p.a., Spirit Super MySuper Balanced had a past 5-year return of 5.78% p.a., and Spirit Super Balanced had a past 5-year return of 5.78% p.a. These figures provide insight into how different funds have performed over the past few years and may be a useful factor to consider when selecting a superannuation fund.

In conclusion, the performance of MySuper funds in Australia has been a cause of concern for many, with most funds ending the 2021-22 financial year in the red. However, Hostplus is the best performer of the year since it was able to give its members modest returns. Despite this, MySuper fund performance has lagged behind other investing options, which is concerning for consumers who depend on these funds for their retirement. To make sure that Australians are appropriately prepared for their retirement, the industry must examine its investment strategy more closely and pinpoint areas for improvement.

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