Alex Jamieson: Why comparing super funds isn’t as simple as it looks - don't risk getting things wrong

Australians are constantly told to shop around for the 'best' superannuation fund, but according to Alex Jamieson, leading financial expert and founder of AJ Financial Planning, comparisons can be misleading because no two funds invest in exactly the same way.
 

"Comparing super funds, while easy on the surface, is far more complicated than people realise. Numbers are important, but what lies beneath is even more critical, because every investment carries a degree of risk," Jamieson said.
 

Not all super funds invest the same way
 

"Many people believe that looking at one fund's performance against another tells the full story. It doesn't," Jamieson said.
 

"Super funds don't all invest in the same assets. Some may hold more shares, while others may lean heavily into property, infrastructure, private equity or fixed interest. These underlying differences make it very difficult to compare like-for-like."
 

Different asset types, different risk levels
 

Super funds typically offer a mix of defensive assets such as cash, bonds and fixed interest, growth assets like Australian and international shares, property, infrastructure and private equity, and increasingly green or ethical investments. The way these are combined has a direct impact on both returns and risk. Defensive assets are generally lower risk but deliver smaller returns, growth assets have higher potential but also more volatility, and sustainable options are shaped by environmental and social screens that may perform differently to traditional portfolios.
 

Within each fund, members can usually choose from a variety of investment options. These may include balanced funds, high growth funds, socially aware or ethical funds, indexed diversified portfolios, conservative balanced funds or more stable options. Each of these choices blends defensive and growth assets differently, meaning that two people in different options within the same fund can end up with very different outcomes over time.
 

"Some funds offer strategies that lean towards aggressive growth, while others are structured to be more conservative," Jamieson said.
 

"Balanced funds remain the most commonly used and there are also products designed to gradually shift members into more defensive assets as they get closer to retirement. Increasingly, funds are also catering to people who want their super to align with their personal values through socially responsible or sustainable investments."

Timing matters in your super journey
 

Jamieson stressed that choosing a fund is not about chasing last year's performance but about matching your investments to your overall financial situation, age and retirement timeline.
 

"A person in their twenties or thirties who is still decades away from retirement may be able to tolerate the ups and downs of growth assets, while someone approaching retirement may need the stability of defensive assets to protect the savings they have built," he said.
 

He cautioned that making the wrong choice can significantly impact retirement outcomes. What may look like a small difference in returns today can compound into a very large gap over decades, ultimately reducing the income available in retirement.
 

The bottom line
 

"Super is personal," Jamieson said.
 

"The right fund for you is the one that matches your risk tolerance, values and time horizon. Always look beneath the headline returns to understand what sits inside your fund. The decisions you make today will shape your financial security for decades, which is why it's always best to seek professional advice before making changes."
 

Jamieson noted that many people who seek financial advice also consider establishing a self- managed superannuation fund. An SMSF provides greater control and flexibility, allowing members to select specific investments such as shares, property, cash or term deposits and even pool balances with family members.
 

"For many, the attraction lies in tailoring strategies, accessing broader investment opportunities and using tax planning more effectively. However, SMSFs carry additional responsibilities and are generally best suited to those with significant balances, often upwards of $500,000 and the discipline to manage them with professional guidance," Jamieson added.
 

About Alex Jamieson
 
Alex Jamieson is the founder of Melbourne-based advisory firm, AJ Financial Planning. With a firm belief in responsible investing, Alex crafts investment portfolios for clients that not only meet their financial objectives but are also sustainable and match their ethical values.
 
A highly respected financial advisor, Alex is considered one of the country's leading experts on all matters financial planning, investing and retirement.
 
http://www.ajfp.com.au/