Superannuation Funds: Why Size Matters

The size of a superannuation fund certainly affects its performance. New research demonstrates how big funds benefit from economies of scale through better gross investments, lower investment expenses and lower operating costs. Typically, not-for-profit industry funds are the winners, clearly outstripping their retail counterparts. Industry experts, however, suggest investors be mindful of exceptions to the rule. So why do members plug on with lower-return smaller funds? Lack of insight and interest keep them hanging in by default. But the good news is that almost all super funds look set to grow with the incremental shift in compulsory super contributions from the present 9% to 12%.