Geoff Warren (left) and David Bell

Combining size and flow rates creates a rich picture of the super fund landscape. In this article, we divide the universe of top 50 APRA-regulated funds by assets into four quadrants based on these two dimensions. The analysis reveals that some funds are in a strong position and their future is bright. For others, there is uncertainty and work ahead.

Exploring the super fund landscape

Our analysis involves taking APRA’s annual fund-level superannuation data, as described in previous articles on size and flow, and cleaning it up.

We then create a scatterplot for the top 50 funds that maps out growth rates arising from net flows (which exclude mergers and investment returns) against net assets under management. We then create four quadrants divided by two red lines.

The vertical line represents the $30 billion asset figure initially espoused by APRA for sufficient scale (although they later made mention of $50 billion as a marker). The horizontal line represents the aggregate 2.4 per cent growth rate via net flows experienced by the top 50 funds in FY2023.

Before we explore each quadrant, it is important to acknowledge that scale is a complex issue and the $30 billion marker is only notional. Indeed, research by The Conexus Institute (Do superannuation fund members benefit from large fund size?) argues that assets under management is not as important as implementing it successfully given a fund’s size, whatever it may be.

Quadrant one – Below scale but good growth

The table below lists the quadrant one funds with low scale but above-system flows. Apart from three more traditional industry funds with flows just above system rates (Prime, AMIST and NESS), the other funds display two themes.

First is a prevalence of funds that are successfully targeting the external financial adviser market, often supported by technologically advanced platform service offerings. HUB24 and Netwealth stand out as they could both reach the $30 billion scale mark quickly if they maintain their high growth rates. Many funds in this group also undertake other activities and have non-super product offerings that may assist with attaining scale for the overall business.

Second is that pure play sustainable investment offerings are capturing flows that are solidly above-system. This thematic is represented by Australian Ethical and Future Super.

Fund Net assets ($b) Net flows/net assets
HUB24 24.8 22.2%
Netwealth 23.8 13.2%
Future Super 10.1 5.8%
Australian Ethical 7.2 7.2%
Prime Super 6.6 2.5%
Praemium 3.8 14.1%
Centric 3.5 3.7%
AMIST (Australian Food Super) 2.9 2.5%
Fiducian 2.3 8.9%
AMG Super 2.1 9.9%
Tidswell 1.4 15.8%
Dash 1.1 10.2%
NESS Super 1.1 2.7%
Mason Stevens 0.9 35.5%

Quadrant two – Good scale and good growth

Funds in quadrant two have a strong competitive position, benefitting from the combination of good scale and above-system growth through flows. AustralianSuper, Macquarie and to a lesser extent HOSTPLUS and REST are standouts for having strong flows along with sizeable assets.

It is a fascinating situation when the largest fund is also one of the fastest growers in this quadrant. AustralianSuper is benefitting from strong natural flows and a leading position in the marketplace for competitive flows, albeit moderating as explored in our flows article.