Choosing a super fund as a new investor in Australia

Choosing the right superannuation fund is a crucial step in managing your long-term savings and working towards your goal of financial independence. Here are some key factors to consider when selecting a super fund:

1. Investment Options: Different super funds offer various investment options. These can range from conservative (lower risk, lower return) to aggressive (higher risk, higher return). Since you’re aiming for financial independence by 40 and you’re currently 25, you might consider funds that offer growth-oriented investment options, which typically invest a larger proportion in assets like stocks.

2. Fees: Fees can significantly impact your investment returns over time. Look for a super fund with low fees. This includes administration fees, investment fees, and any other charges. Comparing these fees among different super funds can help you choose a cost-effective option.

3. Performance: While past performance is not a reliable indicator of future performance, it can give you an idea of how well the fund is managed. Look at the long-term performance history of the fund to see how it has managed through different market cycles.

4. Insurance: Many super funds offer life insurance, disability cover, and income protection. Consider what level of insurance you might need and compare what’s offered by different super funds in terms of coverage and cost.

5. Additional Benefits: Some funds offer extra benefits like financial advice, educational resources, or flexible investment options. Consider whether these benefits are important to you and if they justify any extra cost.

6. Reputation and Stability: Consider the reputation and stability of the fund. Look into how long the fund has been operating and read reviews or testimonials from other members.

Given your goal of reaching financial independence by a

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Hi Isabella.

The best bets for super funds are typically lower cost ‘industry’ funds. Examples of these are UniSuper, ART Super, Hostplus, REST.

There’s no one that is guaranteed to be better, they are all generally fairly similar.

For people aiming for long term set and forget and higher returns, they would typically choose something like ‘high growth’ or ‘indexed shares’ from the fund options.

Hope that helps.
Dave