Measuring the Performance of Your Super

THE MAIN OUTCOME YOU LOOK FOR WHEN INVESTING IS TO GAIN A RETURN ON THE INVESTMENT, AND THE SAME APPROACH APPLIES WHEN INVESTING MEMBERS SUPER AT AUSTRALIANSUPER. THERE ARE MANY WAYS TO MEASURE RETURNS AND COMPARE PERFORMANCE WHEN LOOKING INTO HOW YOUR SUPER IS INVESTED.

DIFFERENT TYPES OF RETURNS

Your investment return is the amount that an investment earns over time. When looking at the performance of your super, knowing the different types of returns helps you to compare returns to a benchmark or to compare investment options.

A key difference between common return measurements is the treatment of fees. Fees are very important to understand when it comes to investing as they can reduce your return, for example: • Gross Investment Return is the return of an investment before investment fees, administration fees or taxes are deducted. • Net Investment Return is the performance of the investment after investment fees, transaction costs and taxes are deducted. • Crediting Rate Return provides the rate for investment earnings that are credited to your account and used for calculating your estimated balance. • Net Benefit is the return after investment fees, transaction costs, administration fees and taxes.

COMPARING THE PERFORMANCE OF DIFFERENT INVESTMENT OPTIONS

To compare investment options, looking at returns after all fees (Net Return or Net Benefit), provides an equal comparison. To see how an investment option has performed, a look at the net returns over 3, 5 or 10 years will highlight the longer-term return including the impact of fees over time.

HOW PERFORMANCE CHANGES THE BALANCE OF YOUR ACCOUNT

Performance figures that are published for the investment options show the return for a period of time. These returns can grow your super balance when investment markets are rising or lower your balance during market declines.

COMPARING PERFORMANCE TO BENCHMARKS

To see how your investment option is delivering returns for you over time compared to similar investments in the market, it can be helpful to compare performance to a benchmark. Similar to types of return measurement, there are different types of benchmarks to help you compare. These include peer, goalbased and market-based benchmarks.

REGULATOR ASSESSMENTS

One of the aims of Australia’s regulators is to improve visibility of poor member investment returns and assist consumers to make informed choices about their superannuation product. To achieve this, APRA assesses performance using the Performance Test and the MySuper Product Heatmap. AustralianSuper supports mandatory performance assessment. This helps to address poor fund performance in the industry.

To read more about the different types of returns used by the super industry, the regulator performance test and AustralianSuper, and how you can use them to make informed investment choices, visit australiansuper.com/ investment-articles.

Investment returns aren’t guaranteed. Past performance isn’t a reliable indicator of future returns.

Sponsored by AustralianSuper. This information may be general financial advice which doesn’t take into account your personal objectives, financial situation or needs. Before making a decision about AustralianSuper, you should think about your financial requirements and refer to the relevant Product Disclosure Statement at australiansuper.com/PDS or by calling 1300 300 273. A Target Market Determination (TMD) is a document that outlines the target market a product has been designed for. Find the TMDs at australiansuper.com/TMD. AustralianSuper Pty Ltd ABN 94 006 457 987, AFSL 233788, Trustee of AustralianSuper ABN 65 714 394 898.

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