Who’s hot in super?

New research shows that an industry fund, REST, has been the best performer in Australia’s superannuation industry over the past 10 years, chalking up average returns of 7 per cent a year over that time.

Jeff Bresnahan, of SuperRatings, which produced the research, said  had  seen REST “outperform all competing public offer funds” over that period.

The Retail Employees Superannuation Trust, REST, finished in fine style, producing an 11.4 per cent return for 2009-10.

The fund, which anyone can join, has 1.8 million lucky members.

The share market crash, which precipitated the global economic crisis, has been a nightmare for Australia’s superannuation funds, which invest heavily in global share markets.

The industry, overall, manages some $1.2 trillion.

This is one of the biggest pools of money, anywhere in the world.

However  the industry’s long awaited recovery is under way – and Mr Bresnahan said that, as recently as March average returns close to 15 per cent, had appeared likely for 2009-10.

But a faltering share market – and  fees – had worked together to reduce that average to just 9.8 per cent.

The agency studied balanced fund options.

Mr Bresnahan said that while the latest result might not “look great on paper, in a relative sense balanced options had done what they set out to do.”

They had prevented significant losses, through diversification.”

Mr Bresnahan warned, though, that Australia’s superannuation industry is still not over the shocks produced by the global financial crisis.

“Long term figures for super fund returns are now starting to feel the pain of the prolonged global financial crisis, with the 10 year result falling to 4.5 per cent per annum,” Mr Bresnahan said.

His agency’s research also revealed some of the pain the industry has been experiencing, in the wake of the crisis.

He said personal contributions to Australia’s  super funds  had fallen by “more than 50 per cent”  while new memberships and transfers between funds had been running “significantly lower” than ever before.