If the Productivity Commission's recommendation of a best-in-show list was introduced tomorrow, which super funds would make the cut?
If performance were the key metric used to determine which MySuper products are shortlisted, latest Rainmaker analysis of three-year returns - as at November 2018 - shows the top 10 would comprise nine industry funds and just one retail fund.
Hostplus, Cbus, AustralianSuper, Statewide Super, Local Government Super, Club Plus, Media Super, NGS Super and CareSuper would make the grade. FirstChoice Employer would be the lone retail fund on the list.
This is assuming it is three-year returns the expert panel would be using to determine the shortlist, given the Productivity Commission's recommendation to review the best-in-show every four years.
While the Productivity Commission's final report did state that a high weighting would be placed on a fund's investment strategy and performance, it also listed other metrics that would be measured.
Consideration of a fund's track record on fees, governance and innovations, and how well its group insurance offering caters to new members of all occupations would also be required, the report said.
"The age old adage that past performance is no guarantee of future performance is only true of investment markets in a narrow sense ... The adage is also incongruent with the evidence in this inquiry that good long-term performance is associated with low fees, good governance, and sufficient scale," the report reads.
"That is not to say that judgment will not be required - and thus an expert panel is much better placed to identify likely future outperformers than employers or individual members themselves."
That said; a shortlist based solely on five-year performance figures looks quite different.
Hostplus, Cbus, AustralianSuper, LGS, CareSuper and Statewide would again feature. However, Intrust, BUSSQ, MTAA Super and UniSuper would this time round out the top 10.
Commenting on the report yesterday, ASFA chief executive Martin Fahy said it is disappointing the Productivity Commission has doubled down on the best-in-show list as a mechanism for allocating default super.
"This approach risks creating an oligopoly in default superannuation and reducing long-term competition."
Likewise, FSC chief executive Sally Loane said the list could create a "monolithic concentration of funds, stifle competition and create huge barriers for innovative new products."