Super fund members are spoiled for investment choice. Rainmaker analysis of investment menus offered through Australia’s near-600 superannuation products revealed there were almost 50,000 investment choices available in 2022.
The average product has 85 options though not-for-profit (NFP) funds average just eight while retail products average 134.
Among workplace products, those offered by NFP funds average seven compared to 76 for retail products.
Retail funds offer 96% of all options, with NFP funds offering just 4%.
As most of the retail options are unpopular among fund members, this adds extraordinarily high administrative cost loads to these super funds that must be borne by all members of these funds.
Almost 80% of all options are asset class specific choices, with diversified options making up the remaining 20%.
Table - Superannuation investment options, 2022:
Just 70 MySuper investment options hold 36% of all FUM managed through NFP and retail super funds.
Other diversified options hold much of the remaining FUM. Eleven percent of all options are available through workplace superannuation products, 43% through personal products and 46% through retirement products.
Australian equity and international fixed interest options are the most commonly offered, accounting for a staggering 52% of all options.
NFP super funds’ diversified options make up 56% of all the options they offer.
For retail super funds they account for just 19%, meaning 81% of their investment options are asset class specific.
Personal and retirement retail products, that are losing market share, hold a disproportionate share of Australia’s superannuation investment choices.
