AustralianSuper leads the way in super funds growth

Australia’s largest superannuation fund, AustralianSuper, grew by more than any of its nearest rivals during the past financial year, data from The Conexus Institute shows.

In the past financial year AustralianSuper increased its net assets by $43bn.

The growth of Australia’s largest super fund, the $367bn AustralianSuper, continued to outstrip all other super funds during the last financial year, according to a report.

The report by The Conexus Institute that reviews the fund flows of all the major super funds in the year to the end of June 2024, highlights the increasing domination of the big funds in the APRA-regulated superannuation market. It says the figures reveal the “dominant position” of AustralianSuper in the market for APRA-regulated funds, with the megafund enjoying strong “natural” inflows from existing members and continued “competitive” inflows from members transferring from other funds.

AustralianSuper increased its net assets by $43bn over the year, the largest of any super fund, from a combination of investment ­returns and net contribution inflows. “If AustralianSuper’s natural (inflows) were packed into a stand-alone super fund, it would be the 25th largest super fund,” the report notes.

Its closest rival, the $300bn plus Australian Retirement Trust, increased its net assets by $40bn over the year, but this was boosted by a series of mergers, including taking in the management of Commonwealth Bank Super and Qantas Super.

AustralianSuper’s net inflows from member contributions were up by $16.4bn over the year, double the $7bn in net inflows to ART.

ART’s assets were boosted by another $12bn in growth from mergers and taking over the management of new funds.

The report shows the top two funds are surging ahead of other major funds in terms of assets, growing by a combined $84bn over the year, well ahead of the $70bn growth in the next six largest super funds combined.

The report says Vanguard Super is the fastest-growing fund by asset growth rate, with total ­assets increasing by more than 120 per cent over the year, from a low base.

It notes that the finalisation of the merger of Equip Super and TelstraSuper will mean that there are now 16 members of the “big fund club”.

It says a small number of funds experienced “sizeable” net outflows, led by retail funds Insignia, AMP and BT.

While the majority of super funds surveyed show positive “natural” inflows (inflows from existing members), the major growth was enjoyed by four funds: AustralianSuper, ART, Hostplus and Rest.

The report shows that while AustralianSuper enjoyed strong growth from competitive inflows from other funds over the year, the amount gained from people switching into the fund from other funds has fallen sharply over the years, from $15.4bn in the 2022 financial year, to $9bn in the 2023 financial year and $5.1bn in the 2024 financial year.

AustralianSuper’s growth from competitive funds is slowing with falling rates of people shifting in from other funds and a “sizeable increase” in rollouts from the fund.

HUB24 has overtaken AustralianSuper in terms of new fund flows from people moving from competitor funds.

The second-largest fund, ART, recorded net outflows of $1.5bn to competitor funds in the 2024 financial year. Construction industry super fund Cbus recorded an outflow of $900m to rival funds for the period.

Vanguard enjoyed $540m in inflows from rival funds over the 2024 financial year, after an inflow of $720m from competitor funds the year before.

The report says that smaller super funds will come under pressure to merge as they have to deal with issues including the need to cater for members moving into retirement as well as other issues such as cybersecurity.

But it notes that there is only a small number of suitable merger candidates, with funds needing to be compatible for a successful merger to work.