Industry vs retail funds

I'm building my wealth | | 2 min read

You’ve probably seen the TV ads.

The ones that compare superannuation returns between industry and retail funds.

But what do those terms really mean? And how does Equip compare? 

Let’s take a closer look.

The difference between members and shareholders

Most businesses set out to make a profit. Superannuation funds are no different. The main difference between industry and retail funds is how those profits are distributed.

Industry funds like Equip exist to benefit their members. That means any profits they generate are returned to members.

Retail funds have external shareholders that need to be paid. Any profits they generate are shared between fund members and these external parties.

We fall into that first category. We're an industry super fund, here to serve our members' interests. We sometimes call ourselves a profit-to-member fund, but it's essentially the same thing. 

A short history of super funds

Australia’s superannuation system has a long and complex history

Industry funds were originally created to serve specific industries, for example, car manufacturing or teachers. Over the years these restrictions have eased, and the funds have become broader, allowing members from all industries. 

We fall neatly into that category. Equip started in 1931 to serve the Victoria energy sector. Since then, we’ve grown and expanded to become one of Australia’s longest running industry funds.

Retail funds were first introduced in the early 90s when the Federal Government introduced compulsory superannuation. These funds allowed anyone to join. They’re generally managed by banks and other financial institutions.

The Australian superannuation industry currently holds approximately $3.1 trillion in assets. That money is distributed along these lines:

Fund Type

Percentage of 

Industry Fund


Self-Managed Super Fund


Retail Fund


Public Sector Fund*


Corporate Fund


Source: Canstar
*Public sector funds are only open to people working in the public sector.

A better retirement

So, the million-dollar question. Which type of fund has performed better?

The 2019 Productivity Commission into the competitiveness of the superannuation industry found that industry funds had consistently outperformed retail funds.

That’s backed up by data from SuperRatings, which provides 10-year comparison numbers. It shows that a typical industry fund returned  8.42% over the previous decade. Retail funds returned 7.84% p.a. during that same time.

Higher returns mean a higher super balance when you retire, and small differences can add up over the course of your working life. 1% might not sound like much, but it can certainly add up over the years, as the table below shows.


Scenario 1

Scenario 2

Scenario 3

Starting age




Retirement age




Starting gross
annual income




Starting balance




investment returns




Account balance
at retirement




Source: Canstar. Assumptions ^ 

Equip deliver top performance

A small difference in investment return can have a significant impact on your long-term super balance. That’s also true for industry funds.

While history shows us that industry funds tend to deliver higher returns, not all industry funds are equal. Some have lower fees, some have higher returns, and some sit in the middle. So, it’s important to look at the big picture and shop around.

Equip has outperformed both the retail fund and industry fund average over the previous 10 years. We’re lower on fees, and our investment returns are top tier.

You can compare these results yourself, and rest easy knowing your super is on track for a better retirement.

^Assumptions: Source: – 29/01/2021. **Based on a 30-year-old with a starting balance of $25,096 per APRA’s Annual Superannuation Bulletin, *starting gross annual income of $61,984, per ABS Median Weekly Earnings (Aug 2020) of a 25-34 year old, increasing by inflation (assumed to be 2.5% in line with the Reserve Bank’s target range of 2%-3%) each year, retiring at age 67. Employer contributions are presumed taxed at 15%. SG contribution amounts per Government-announced rates. Investment returns assumed to be 6%, 7% or 8% p.a. for scenario 1, 2 and 3 respectively. Net performance deducts average fees of 1.42% p.a., based on products in Canstar’s database for a 30-year-old with a $20,000 balance. Average life and TPD insurance premium of $266 is assumed to be charged at the end of each year, based on products in Canstar’s database for those aged 30 years. End balance at retirement amounts are shown in “today’s dollars”, i.e. they have been adjusted for inflation. Please note all information on income, annual superannuation fees and performance returns are used for illustration purposes only. Actual returns and the value of your investment may fall as well as rise from year to year; this example does not take such variation into account. Past performance is not a reliable indicator of future performance.

Issued by Togethr Trustees Pty Ltd ABN 64 006 964 049, AFSL 246383 ("Togethr"), the trustee of the Equipsuper Superannuation Fund ABN 33 813 823 017 ("the Fund"). The information contained herein is general information only and does not take into account your personal financial situation or needs. You should consider whether this information is appropriate to your personal circumstances before acting on it and, if necessary, you should also seek professional financial advice tailored to your personal circumstances. Where tax information is included, you should consider obtaining personal taxation advice. Before making a decision to invest in the Equipsuper Superannuation Fund, you should read the appropriate Product Disclosure Statement (PDS) and Target Market Determination for the product which are available at  Financial advice services may be provided to members by the trustee’s related entity Togethr Financial Planning Pty Ltd (ABN 84 124 491 078; AFSL 455010). *Past performance is not an indication of future performance.

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