Superannuation Fund Performance and Fund Fees

32 Pages Posted: 9 Aug 2016  

Andrew B. Ainsworth

University of Sydney - Finance Discipline; Financial Research Network (FIRN)

Shumi M. Akhtar

The University of Sydney

Adam James Corbett

The University of Sydney - Discipline of Finance; Financial Research Network (FIRN)

Adrian D. Lee

University of Technology, Sydney - Finance Discipline Group; Financial Research Network (FIRN)

Terry S. Walter

University of Sydney; University of Technology, Sydney - School of Finance and Economics; Financial Research Network (FIRN)

Date Written: July 26, 2016

Abstract

Superannuation fees have come under public scrutiny in recent years with the belief that many are set too high. Using a comprehensive dataset of Australian superannuation funds, we examine the relationship between investment fees and fund performance. We find that the most expensive funds produce significantly higher after-fee raw returns than the cheapest funds. However, the most expensive funds do not earn significantly higher benchmark-adjusted returns after asset allocation adjustment, after fees, than the least expensive funds. Furthermore, we do not observe a strong relationship between benchmark-adjusted fund performance and their investment fees. These findings suggest that retirement balances will not be worse off if superannuation investors are to hold the more expensive funds.

Keywords: Investment fees, Performance evaluation, Superannuation funds

Suggested Citation

Ainsworth, Andrew B. and Akhtar, Shumi M. and Corbett, Adam James and Lee, Adrian D. and Walter, Terry S., Superannuation Fund Performance and Fund Fees (July 26, 2016). CIFR Paper No. 115/2016. Available at SSRN: https://ssrn.com/abstract=2814788

Andrew B. Ainsworth (Contact Author)

University of Sydney - Finance Discipline ( email )

Cnr. of Codrington and Rose Streets
Sydney, NSW 2006
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

Shumi M. Akhtar

The University of Sydney ( email )

University of Sydney Business School
corner of Codrington Street and Darlington Street
Chippendale, NSW 2006
Australia
61290369309 (Phone)

HOME PAGE: http://www.firn.org.au

Adam James Corbett

The University of Sydney - Discipline of Finance ( email )

P.O. Box H58
Sydney, NSW 2006
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

Adrian D. Lee

University of Technology, Sydney - Finance Discipline Group ( email )

PO Box 123
UTS Haymarket Campus
Broadway, NSW 2007
Australia
95147765 (Phone)
95147722 (Fax)

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

Terry Stirling Walter

University of Sydney ( email )

P.O. Box H58
Sydney, NSW 2006
Australia

University of Technology, Sydney - School of Finance and Economics ( email )

Haymarket
Sydney, NSW 2007
Australia
+61 2 9514 3860 (Phone)
+61 2 9514 7711 (Fax)

HOME PAGE: http://datasearch.uts.edu.au/business/finance/staff/StaffDetails.cfm?UnitStaffId=5373

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

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