“MySuper vs retail” is a common comparison in Australian superannuation — but it conflates two different distinctions. MySuper is a product type (a regulatory category); “retail” describes fund ownership (profit-for-member vs shareholder-owned). Both categories can overlap. Here’s how to separate them.
The Two Distinctions
1. MySuper vs non-MySuper (product type)
- MySuper: A standardised, APRA-authorised default product with regulated features, fee disclosures, and an annual performance test. Any fund — industry or retail — can have a MySuper product.
- Non-MySuper (choice): Investment options you actively select — may offer more choices, sector funds, ethical options, but may have higher fees and less regulatory oversight.
2. Industry fund vs retail fund (ownership structure)
- Industry funds: Member-owned, not-for-profit. All investment returns (after fees) go back to members. Examples: AustralianSuper, Hostplus, Aware Super, REST, Cbus.
- Retail funds: Shareholder-owned, run for profit. A portion of returns may go to shareholders. Examples: AMP, Colonial First State, MLC, North (IOOF/Insignia), BT.
Most large industry funds offer a MySuper default. Many retail funds also have MySuper products — but have historically had lower comparative performance on the annual test.
Performance Comparison
APRA’s annual performance test data and 10-year return data consistently shows that:
- Large industry fund MySuper products have outperformed most retail fund MySuper products over 10-year horizons
- The top 5–10 performing MySuper products are predominantly industry funds
- Several retail fund MySuper products have failed the annual APRA performance test
- The performance gap is largely explained by lower fees and higher allocations to unlisted assets (infrastructure, property) in industry funds
Past performance is not a reliable indicator of future performance.
Fee Comparison
| Fund type | Typical total cost ratio (% p.a. on $50,000 balance) |
|---|---|
| Large industry fund MySuper | 0.5%–0.8% |
| Retail fund MySuper | 0.8%–1.5%+ |
| Retail wrap/platform (non-MySuper) | 1.0%–2.5%+ |
Fee differences of 0.5–1% per year compound significantly over a career — the difference between 0.6% and 1.1% total fees on $100,000 over 25 years (assuming 7% gross return) is approximately $70,000.
Insurance Comparison
| Industry funds | Retail funds | |
|---|---|---|
| Default cover | Life + TPD; sometimes IP | Life + TPD; sometimes IP |
| TPD definition | Often “any occupation” (some “own occupation”) | Often “own occupation” at better products |
| Underwriting | Limited default underwriting | More product variety; some with better terms |
| Claims process | Managed through fund trustee | Managed through insurer |
Neither is universally better — insurance quality varies fund by fund.
Investment Options
- Industry fund MySuper: Typically 1 diversified option (or lifecycle) at the default level, with additional choice options (sector, ethical, indexed, balanced) available to members who actively choose
- Retail fund platforms: May offer a much wider menu — hundreds of managed funds, direct shares, ETFs — but these are generally non-MySuper choice products accessed by members who actively select them
For members who want index funds, sector exposure, or direct shares within super, retail platforms or industry funds with strong choice menus may offer more flexibility.
When Retail Super Makes Sense
Despite industry funds’ general performance advantage, retail or platform super may suit you if:
- You want extensive investment choice (direct shares, managed accounts)
- You need specialist financial advice integrated with your super
- Your employer has a corporate plan with negotiated fee discounts that make a retail platform competitive
- You have a high balance and want tax-integrated estate planning features
Frequently Asked Questions
Are retail super funds worse than industry funds? On average, based on historical data, large industry funds have outperformed retail fund MySuper products after fees. However, individual fund performance varies — some retail products have performed well. Always compare the specific fund, not the category.
Can I have an industry fund with additional investment options? Yes — most large industry funds (AustralianSuper, Hostplus, Australian Retirement Trust) offer a broad choice menu beyond their MySuper default, including indexed options, high-growth, cash, and fixed income.
What happened to many retail super funds? Following the Royal Commission into Banking (2018) and the APRA performance test (2021), several retail funds lost members to industry funds and either merged, exited the super market, or restructured. AMP sold Colonial First State; MLC was sold by NAB to Insignia.
For more: Industry vs Retail Super, Best Performing Super Funds, MySuper Explained. For advice on which type of fund suits you, speak with a licensed financial adviser via MoneySmart.