32 Pages Posted: 9 Aug 2016
Date Written: July 26, 2016
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: 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