Whilst I was away travelling I checked into my LinkedIn account and was greeted with the usual amount of spam and rubbish job offerings but in typical LinkedIn fashion, I was bombarded by ads extolling the virtues of Australian Super. You can imagine my delight when they dropped in an ad with the tagline Proven Performance for your people – this is like a red rag to a bull for me so I went to their website to look at their proven performance and found the following table.
Source – Australian Super
Whenever I see this sort of thing I can’t help but compare it to what you would get simply holding the index passively. The long term rate of return for the All Ordinaries Total Return Index is 13% – this is the benchmark against which al such managers should compete. Taking their initial starting point of $50,000 I have redone their table but this time I have included the amount that would have been generated by the All Ordinaires TR Index, I have also included the opportunity cost or profits foregone by choosing their vehicle.
What is obvious is that at no point does performance come anywhere near matching the market. You let other people manage your money at your peril.