The analysis considered the investment performance to 30 June 2020 that members aged in their 20s would have received after applying their age-based fees.
Young people can pay fees as much as eight times higher than older super fund members, before the 3% fee cap comes into effect, noted Rainmaker.
Rainmaker's assessment reviewed super funds that young people are likely to join, reviewing MySuper products and selected retail products that are becoming popular among young people. Reflecting this, Rainmaker did not assess the impact of insurance costs.
QSuper was found to have delivered the best value over five-years, achieving returns of 6.5% pa. It also ranked third over three-years with 5.6% pa.
The digital disruptor Spaceship came in first over three-years and one-year with returns of 12.3% pa and 11.9% pa respectively.
Rainmaker's age-based analysis lined up MySuper single strategy products against lifecycle products for people in their 20's. On top of this, most fee studies normally assume a member has a $50,000 balance.
But most young people have much lower balances of $5,000. Super fund fees can hit these lower account balances harder, especially if there is a high dollar-based member fee.
Illustrating how this works in practice, even small member fees of $80 per year can have a huge impact.
Add in the cost of compulsory insurance and they could be paying total fees equivalent of 25% of their account balance.
"This means for many young people, superannuation fees are unfortunately what they should be worrying about, not returns," said Alex Dunnin, Executive Director of Research at Rainmaker Information.
"The way super funds structure their fees mean young members pay disproportionately higher fees than older people."
"This creates a big problem for the superannuation sector. It leaves it open to claims it is a product designed only for old people. Yet they say they want young people to be engaged with their superannuation."
"This is why we should applaud funds like QSuper andSpaceship. Their innovative thinking is precisely what the superannuation sector needs."
Other funds like Future Super, Virgin Money and Aware Super are leading the performance conversation and they should also be acknowledged.
Rainmaker found that the 10 best super funds for young people - in alphabetical order - are Australian Ethical, Aware Super, FutureSuper, HESTA, Media Super, QSuper, Spaceship, TasPlan, Virgin Money and Vision Super.
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Total risk market inflows were down a marginal 0.6% over the year to June 2024, decreasing from $18.3 billion to $18.2 billion.
Dual access ETPs, which are transacted both on stock exchanges and off-market through funds managers, can cost four times as much as the rest of the Australian ETP market.
