Non profit superannuation funds beat their for-profit rivals by an average 1.5 percentage points last year, returning 6.7 per cent for members compared with 5.2 per cent for retail funds.
The average return on balanced growth funds was 5.8 per cent for the year ended December 2015 and non-profit funds took out the entire top 10 list, according to Chant West research.
The top spot went to MTAA My AutoSuper. The industry fund for workers in the motor vehicle repair trade got a boost from a 24 per cent windfall on the sale of a chain of United Kingdom petrol stations.
Balanced growth funds are those with between 61 per cent to 80 per cent of capital invested in growth assets, such as shares and property. This is where majority of workers have their super invested.
The Chant West annual survey compares the performance of all balanced growth funds. These are most commonly MySuper products, which are the low-cost-no-frills super funds that are eligible to be nominated by employers or in enterprise agreements as the default option for workers who don't choose their own fund.
BUSSQ Super, the industry fund for building and construction workers in Queensland, ranked second in 2015 with an annual return of 8.6 per cent.
Industry funds dominate
Statewide Super, a South Australian based industry fund, ranked third with a return of 8.3 per cent.
The country's largest industry fund, AustralianSuper, came in fourth with a gain of 7.7 per cent.
UniSuper, the industry fund for university employees, ranked fifth with a return of 7.6 per cent.
Rounding out the top 10 was Cbus at 7.5 per cent, Sunsuper at 7.3 per cent, CareSuper at 7.1 per cent, QSuper at 7.1 per cent, and AustSafe at 7 per cent.
"Industry funds also hold the advantage over the longer term, having returned 6.9 per cent per annum against 5.7 per cent for retail funds over the 15 years to December 2015," Chant West director Warren Chant said.
Industry Super Australia chief executive David Whiteley said the data "highlighted the ongoing underperformance of bank-owned super funds".
"The average difference in performance could translate into a difference of many thousands of dollars in Australians' retirement savings," he said.
Separate research released by SuperRatings on Wednesday supported the Chant West data on the relative outperformance of industry funds versus retail funds.
A continued strong showing for the industry fund sector comes at time when it is pushing back against a raft of proposed legislation that would re-shape how it operates.
The government wants to break the "equal representation" model, that sees industry fund boards typically comprised of half employer and half union representatives, by forcing all super funds to appoint one third of independent directors and an independent chair.
The Productivity Commission has also been charged with a review of how default super funds are selected, with the government pushing for the $430 billion a year market to be opened up to more competition from retail funds.
Industry Super Australia and the Australian Institute of Superannuation Trustees have led a campaign against the raft of changes arguing that non-profit funds should not be the focus of reforms when they have delivered superior long-term financial results and been relatively free of scandals that have plagued some of their retail rivals such as Commonwealth Bank of Australia and IOOF Holdings.
Diversification pays off
Overall super fund returns for 2015 were the lowest in four years, but they beat expectations amid tough market conditions.
A preliminary estimate released by Chant West last week had pitched the average annual return to be just 4 per cent.
Some super funds have warned their members in recent months that meeting their long term targets could prove difficult in the coming years against a global backdrop of weakening economic growth forecasts and rising interest rates.
"While the 2015 average return of 5.8 per cent is lower than the 12.7 per cent average over the previous three years members shouldn't be disappointed," Mr Chant said.
"The typical longer-term return objective for these funds is to beat inflation by 3 per cent to 4 per cent per annum, and with the inflation figure likely to come in well under 2 per cent for the year they've pretty much hit that target."
Chant West's analysis of the asset allocation of funds indicated that diversification into unlisted assets typically led to stronger returns.
"The better performing funds in 2015 were generally those that maintained a relatively high exposure to foreign currency (as the Aussie dollar fell), Australian listed property, unlisted property, unlisted infrastructure and private equity, and a lower exposure to Australian shares, hedged international shares, the broader bond market, hedge funds and cash," Mr Chant said.
This comes amid a debate about the relative importants of fees versus net returns, sparked by the 2014 Financial Services Inquiry that called on super funds to lower average fees.
Unlisted assets - such as private equity, infrastructure and private equity - are more expensive for super funds to hold. However these make for a more diversified portfolio and, as with MTAA's windfall on the sale of its petrol stations shows, can sometimes deliver a big boost to returns.