The cheapest super funds in Australia charge total fees of 0.15–0.30% per year — less than one-third of the cost of many standard retail super products. For a $200,000 balance, the difference between a 0.25% fee fund and a 1.5% fee fund is $2,500 per year — every year — compounding indefinitely.
This guide identifies the lowest-fee options available in Australia’s super system and explains what you give up (if anything) by choosing them.
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Key Takeaways
- The cheapest super funds in Australia charge 0.15–0.30% per year in total fees
- Hostplus Index Balanced is one of Australia’s lowest-cost options at approximately 0.21–0.24% on a $100,000 balance
- The fee difference between 0.25% and 1.5% on a $200,000 balance is $2,500 per year — compounding indefinitely
- Low fees do not mean lower returns — passive (index) options have matched or beaten active options over the long run at many funds
- Always verify fees in the fund’s current Product Disclosure Statement — fee schedules are updated periodically
The Lowest Total-Fee Super Options in Australia
Total annual fees below are calculated for a $100,000 balance in the fund’s lowest-fee investment option (typically a passive/index option). Fees include administration fee + investment fee + indirect cost ratio, annualised.
| Fund | Lowest-Fee Option | Approx. Total Fee ($100k balance) |
|---|---|---|
| Hostplus (Index Balanced) | Index Balanced | ~$210–$240 (~0.21–0.24%) |
| AustralianSuper (Indexed Diversified) | Indexed Diversified | ~$230–$260 (~0.23–0.26%) |
| Australian Retirement Trust (Index Balanced) | Index Balanced | ~$240–$270 (~0.24–0.27%) |
| Aware Super (Passive Investment Option) | Indexed Diversified | ~$250–$280 (~0.25–0.28%) |
| UniSuper (various index options) | Index options | ~$200–$240 (~0.20–0.24%) |
| REST (Diversified) | Core Strategy | ~$290–$330 (~0.29–0.33%) |
Approximate figures as at early 2026. Exact fees depend on your balance, the current fee schedule, and the fixed dollar fee component. Always check the fund’s current PDS — fee schedules are updated periodically.
Hostplus Index Balanced — One of Australia’s Cheapest
Hostplus’s Index Balanced option is consistently cited as one of the lowest-cost options in Australia’s super system. It uses passive (index) investing for all asset classes, tracking market benchmarks rather than attempting to outperform them.
The Hostplus Index Balanced option is available to all Hostplus members — not just hospitality workers. Membership is open to any Australian.
Why Hostplus charges low fees:
- The Index Balanced option uses passive management, which eliminates active management costs
- Hostplus is an industry fund — not-for-profit structure keeps overhead low
- Large scale reduces per-member costs
Trade-off: The Index Balanced option’s return will match the benchmark closely — it does not aim to outperform. In practice, Hostplus’s actively managed Balanced option has also performed strongly, but at higher fees.
AustralianSuper Indexed Diversified — Low Fee From the Largest Fund
AustralianSuper’s Indexed Diversified option provides passive exposure to Australian and international shares, plus fixed interest and other asset classes, at a significantly lower fee than AustralianSuper’s default Balanced option.
At around 0.23–0.26% total fees on a $100,000 balance, it is among the cheapest options in Australia from a major fund.
What You Give Up With a Low-Fee Index Option
Very little, in most cases. The common concern is that index options “only” track the market, while active managers can (in theory) outperform. But:
- Most active managers don’t outperform their benchmark over long periods after fees. APRA’s research and global academic evidence consistently shows this.
- The fee difference itself is significant. Even if an active manager adds 0.5% gross outperformance per year, if they charge 1.0% more in fees, you are still 0.5% per year worse off.
- Index options still diversify appropriately. Indexed Diversified and Index Balanced options hold Australian shares, international shares, and fixed interest — providing broad diversification within a passive framework.
The main scenario where active management has historically added value in Australian super is in unlisted assets (direct property, infrastructure, private equity) — which cannot be passively replicated. Top-performing industry funds like AustralianSuper and Aware Super allocate significantly to these asset classes, which contributes to their strong active returns. This is a genuine trade-off in pure index options.
Fees by Balance Size — Which Fund Is Cheapest for You?
Funds charge a combination of fixed dollar fees (same regardless of balance) and percentage fees (proportional to balance). The fixed fee has a bigger impact at small balances.
Approximate Total Annual Fee by Balance
| Balance | Hostplus Index Balanced | AustralianSuper Indexed Diversified | Average Industry Fund (Balanced) | Average Retail Fund (Balanced) |
|---|---|---|---|---|
| $10,000 | ~$90 (0.90%) | ~$90 (0.90%) | ~$140 (1.40%) | ~$230 (2.30%) |
| $50,000 | ~$115 (0.23%) | ~$130 (0.26%) | ~$350 (0.70%) | ~$700 (1.40%) |
| $100,000 | ~$165 (0.17%) | ~$180 (0.18%) | ~$570 (0.57%) | ~$1,150 (1.15%) |
| $250,000 | ~$360 (0.14%) | ~$400 (0.16%) | ~$1,300 (0.52%) | ~$2,600 (1.04%) |
Approximate and illustrative. The fixed dollar component means very small balances pay proportionally more. For large balances, the percentage investment fee dominates.
At small balances ($10,000–$20,000), the difference between a low-fee index option and a standard industry fund is relatively modest in dollar terms — though still worth minimising. At large balances ($100,000+), the difference becomes substantial.
Are the Cheapest Funds Also Good Funds?
Yes — the funds with the lowest-fee index options (Hostplus, AustralianSuper, Australian Retirement Trust, UniSuper) are also among Australia’s top-performing funds by net long-run returns in their active default options. They are well-established, APRA-regulated, and have passed annual performance tests.
The index options within these funds are not a “discount” compromise product — they are a deliberate alternative for members who prefer passive investing at minimum cost.
How to Switch to a Low-Fee Option
If you’re already a member of a fund that offers a low-cost index option (e.g. AustralianSuper, Hostplus, Australian Retirement Trust), you can switch to it without changing funds:
- Log in to your fund’s online portal
- Navigate to “Investment options”
- Select the index option
- Choose whether to switch your existing balance, future contributions, or both
For a step-by-step guide, see How to Change Your Super Investment Option.
If your current fund doesn’t offer a low-fee index option and you want to switch funds, see How to Consolidate Your Super.
Frequently Asked Questions
Is the cheapest super fund always the best choice? Fees are critically important, but they’re not the only factor. Insurance cover, the fund’s financial stability and APRA standing, the available investment options, and long-run net returns all matter. The cheapest option is the best option all else being equal — but make sure you’re comparing appropriately.
Can I join Hostplus or AustralianSuper even if I’m not in their industry? Yes. Both Hostplus and AustralianSuper are open to any Australian worker, regardless of industry. Membership is not restricted to the hospitality or construction sectors. Most large industry funds are open to the public.
Do low-fee funds have worse insurance? Not necessarily. Major industry funds like AustralianSuper and Hostplus provide competitive group insurance (death, TPD, income protection) at group rates. However, switching to a low-fee index option within the same fund doesn’t affect your insurance — insurance is usually attached to your fund membership, not your investment option.
What about SMSFs — are they cheaper? For most people, no. SMSFs have significant fixed costs — accounting, auditing, administration, and trustee liability. On balances below $200,000–$500,000, SMSF costs typically exceed 1–2% of balance per year. SMSFs become cost-competitive (relative to low-fee industry funds) only at very large balances. See SMSF Guide Australia for more detail.
See also: Super Fees. For advice tailored to your situation, speak with a licensed financial adviser. You can find one through the ASIC financial advisers register or MoneySmart.