Superannuation Fees, Asset Allocation and Fund Performance

39 Pages Posted: 14 Sep 2021

See all articles by Andrew Ainsworth

Andrew Ainsworth

University of Wollongong - School of Accounting, Economics & Finance

Shumi M. Akhtar

The University of Sydney

Adam James Corbett

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

Adrian D. Lee

Deakin University - Department of Finance (Property and Real Estate)

Terry S. Walter

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

Date Written: August 31, 2021

Abstract

Superannuation fees have come under public scrutiny in recent years with the belief they are too high. We examine the determinants of fees and their relationship with fund performance. Superannuation funds with higher investment fees have higher allocations to asset classes that are riskier and are more expensive to manage. For-profit retail funds charge both higher investment fees and administration fees than other funds. Funds with higher investment fees do not generate higher returns than the least expensive funds. These findings suggest that superannuation members may not earn higher after-fee risk-adjusted returns by holding funds with higher fees.

Keywords: Superannuation funds, investment fees, administration fees, asset allocation

JEL Classification: G11

Suggested Citation

Ainsworth, Andrew and Akhtar, Shumi M. and Corbett, Adam James and Lee, Adrian D. and Walter, Terry Stirling, Superannuation Fees, Asset Allocation and Fund Performance (August 31, 2021). Available at SSRN: https://ssrn.com/abstract=3922413 or http://dx.doi.org/10.2139/ssrn.3922413

Andrew Ainsworth (Contact Author)

University of Wollongong - School of Accounting, Economics & Finance ( email )

Northfields Avenue
Wollongong, NSW 2522
Australia

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

Deakin University - Department of Finance (Property and Real Estate) ( email )

70 Elgar Road
Melbourne, VIC 3125
Australia

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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