Nathan Spencer




The Best Super

Dec 2023

2 years ago, I made the foolish decision to join Spaceship super. They had the most exposure to technology stocks, which I thought would have the highest return for my retirement. But, while the software is great, their fees are quite high - something like 1% annually (half my investment over 50 years) - and they've had a bit of trouble with ASIC recently.

So, I embark on my journey to find a better super fund - at least for the next 10 years.

What's my criteria?

Since I have at least 50 years until I access my super, I'm looking to maximise risk/reward for the lowest fees.

While I would like to invest my super purely in technology stocks, it's not offered in a passive way by super funds. (I think managed investments eat into your returns so much that they're not worth considering.)

What you can choose, however, is the allocation to international shares. And I think that's the way to go - since you diversify yourself from the Australian market (which I'm already incredibly exposed to via my career). Also, international (mainly US) shares tend to outperform Australian shares over long time periods.

Hedging those overseas investments to currency risk is unnecessary given that this is over a long enough time period.

So, overall: looking for a super fund which offers an international index at low fees.

The Largest Super Funds

It's really hard to find good information on super funds. There's an ATO super comparison tool but the first time I tried to use it the site was down for maintenance and now it seems to be just broken (your tax dollars at work!).

Someone on reddit made this cool spreadsheet which compared fees across different super funds, if you trust their data.

But, I think it makes sense to look through the international index funds by major super funds. They should have the scale to offer decently low fees and reliable service for the next 50 years.

Super Fund (all passive international index other than Spaceship) Fixed Costs Percentage Costs Approximate cost over 10 years (assuming balance increasing by $10k annually, 10% returns)
REST Super 78 0.16% 2270
Aware Super 52 0.22% 2370
Australian Retirement Trust 62 0.26% 2810
Hostplus 78 0.45% 4440
Australian Super 52 0.53% 4690
HESTA 52 0.60% 5200
MLC 78 0.60% 5550
Spaceship (for fun lol) 78 0.85% 7380

*Note: percentage costs are simplified - fee caps have been ignored as generally only apply to balances above 200k

REST super is probably the best option for an international index fund because of the lowest fees. This difference is only going to compound over longer timeframes.