Industry Super Australia: Funds, Performance & Comparisons

Australia’s mandatory superannuation system holds roughly $4.1 trillion in retirement savings — and a significant chunk of it sits in funds with roots going back to the union movement. Industry super funds now represent over a third of all super assets, yet most working Australians couldn’t explain what sets them apart from the retail alternatives on their fund selection form. The gap matters financially: whether your money ends up in a fund that returns profits to members or one that returns them to shareholders can mean tens of thousands of dollars by retirement.

AustralianSuper members: over 3.6 million ·
$3m super balances projected by 2025: 80,000 ·
Industry Super Australia member funds: 15 ·
Industry funds market share: grew to 40% in FY24

The following table summarises key statistics about industry super funds and their position within the broader superannuation system.

What is an industry super fund in Australia?

Industry super funds began emerging in the early 1980s, originally established by trade unions to provide retirement coverage for workers whose employers had not yet set up dedicated superannuation plans. Unlike retail super funds — which are owned by financial institutions and return profits to shareholders — industry super funds operate on a not-for-profit basis. Any surpluses generated are reinvested into the fund to improve member benefits, lower fees, or expand services.

The key characteristics that define an industry super fund are straightforward: it is member-owned, it reinvests any profits back to members rather than distributing them to external shareholders, and it is open to any Australian worker regardless of their industry or employer. The structural difference is not minor — it shapes how these funds invest, what fees they charge, and ultimately how much retirement savings their members accumulate over decades. The sector is coordinated under Industry Super Australia (ISA), the peak body that represents 15 member funds across the country.

Origins in trade unions

The first industry super funds grew out of collective bargaining agreements negotiated by unions in sectors such as construction, manufacturing, and healthcare. Trade unions recognised that many workers were retiring with inadequate savings and pushed for the establishment of dedicated, member-focused pools of capital. These funds were initially restricted to workers in specific industries, but legislative changes gradually opened them to all Australians.

Profits to members

Because industry super funds have no shareholders, the profit motive that drives retail fund strategy is largely absent. Instead, boards of industry funds typically include employer and union representatives, and decisions centre on member outcomes rather than return-on-equity targets. This governance structure means that fee reductions and benefit improvements flow directly to members rather than being absorbed as dividends by external owners.

Industry super funds hold 58% of all super accounts in Australia — 14.4 million out of 24.9 million — representing by far the majority of working Australians (Canstar). The KPMG analysis found that industry funds grew their market share from 38.2% to 40% over FY24 alone (KPMG), indicating steady expansion of the member-owned model.

Is AustralianSuper an industry super?

AustralianSuper is unambiguously an industry super fund. It is Australia’s largest superannuation fund by membership, with over 3.6 million members and approximately $3.1 trillion in assets as of 2025 (AustralianSuper). The fund was originally formed through the merger of several industry funds covering Australian workers and has remained a not-for-profit, member-owned entity.

Being the largest does not mean AustralianSuper is typical in scale — it dwarfs most other industry funds — but its governance model is fully consistent with the sector. AustralianSuper competes directly with retail fund giants such as AMP and MLC (both owned by financial institutions) for the same members, yet its ownership structure puts it squarely in the industry fund camp.

Largest super funds by members

Five funds dominate Australian superannuation by membership size:

The table below compares Australia’s largest super funds by membership as of end 2024.

The two largest retail funds, Mercer and MLC, together account for roughly 1.8 million members — still less than half of AustralianSuper’s membership base. The data highlights how industry funds have come to dominate by reach, even if retail funds manage substantial asset pools.

Industry vs Retail super funds

The choice between an industry super fund and a retail super fund is not simply a matter of branding. The ownership structure creates ripple effects across investment strategy, fee levels, governance priorities, and ultimately the returns that land in members’ retirement accounts.

The core distinction is ownership. Industry super funds are not-for-profit entities — any earnings are retained within the fund and distributed back to members through lower fees, improved benefits, or better investment returns. Retail super funds are owned by financial institutions — banks, wealth managers, insurance companies — whose primary obligation is to their shareholders. That does not make retail funds automatically inferior, but it means their cost structures and investment incentives differ from those of member-owned funds.

Investment approaches also diverge. Industry funds have historically carried large exposures to unlisted assets — private equity, infrastructure, and direct property — which do not trade on public markets and therefore carry less liquid pricing. Retail funds invest more heavily in publicly listed assets like shares and ETFs, which can be priced daily and respond quickly to market rallies (PSK). This difference in asset mix explains much of the performance variation between the two sectors, particularly when public markets surge or when private asset valuations come under regulatory scrutiny.

Performance records

Over the past decade, industry super funds have regularly topped performance tables compared to retail super funds — a dominance rooted in their lower fee structures, disciplined long-term investment horizons, and the compounding advantage of reinvesting surpluses rather than distributing them (PSK). In the five years to March 2022, the not-for-profit segment grew at 10.1% per annum compared to 3.1% for retail funds — a stark contrast that illustrates the structural advantage of the member-owned model (Canstar).

However, FY25 marked a notable reversal. For the first time in several years, many retail funds outperformed their industry peers. AustralianSuper Balanced returned 9.5% in FY25, while CFS FirstChoice Employer Super Balanced Fund returned 11.4% and Hostplus Balanced returned 10.8% (PSK). The divergence tracks a US and Europe public market rally that benefited retail funds’ listed equity holdings, while unlisted assets in industry funds underperformed or stagnated under APRA and ASIC scrutiny on private asset valuations (PSK).

Ownership differences

Performance aside, the ownership question is the structural heart of the comparison. When an industry fund generates a surplus, that money stays inside the fund. When a retail fund generates a surplus, a portion flows to external shareholders as dividends. Over a working lifetime, and across a fund managing billions of dollars, the compounding effect of returning profits to members rather than shareholders is substantial.

The ownership structure also shapes governance priorities. Board members of industry funds typically include employer and union representatives who are accountable to members rather than institutional investors. Retail fund boards answer to shareholders and must balance member service with return expectations from external owners. AustralianSuper frames its approach as a commitment to long-term member outcomes, noting that choosing the right super fund “should be made with a long-term view” (AustralianSuper).

Across five distinct dimensions, industry and retail funds present a trade-off rather than a clear winner:

The comparison below sets out how industry and retail super funds differ across key structural and performance dimensions.

The trade-off is real: industry funds structurally favour long-term compounding for members; retail funds offer greater flexibility and transparency in listed asset pricing, which proved advantageous in the FY25 market environment.

What are the best performing industry super funds in Australia?

Performance rankings shift from year to year, and no single metric tells the full story. The standard industry approach is to measure net benefit — investment return after fees, costs, and taxes — to provide a fair comparison across funds with different fee structures (AustralianSuper). Specialist outlets including SuperRatings and Canstar publish annual fund rankings based on these net benefit figures.

FY25 results showed industry fund performance as mixed rather than uniformly strong. AustralianSuper Balanced returned 9.5% (PSK), while Hostplus Balanced came in at 10.8% (PSK) — placing Hostplus above the SR50 Balanced Index benchmark of 10.5% and AustralianSuper below it (PSK). The performance gap between industry and retail funds has been narrowing in recent years (Canstar), suggesting that past outperformance is not a guarantee of future results.

Recent rankings

SuperRatings publishes annual top-10 fund comparisons across categories including growth, balanced, and conservative options. The 2025 rankings reflect FY25 returns as the most recent full-year data, supplemented by longer-term net benefit comparisons. For members evaluating a fund, the key takeaway is to look beyond a single year’s result and assess performance across five, ten, and fifteen-year horizons — which is precisely where industry funds have historically demonstrated their structural advantage.

The implication is clear: the industry super model has proven its scale and its appeal to a broad cross-section of Australian workers.

Which are Australia’s largest super funds?

Size in superannuation matters for two reasons. Larger funds can negotiate lower investment management fees due to their scale, and they typically have more resources to dedicate to investment research, governance, and member services. AustralianSuper sits at the top of both the industry fund table and the overall membership rankings — a position it has consolidated over the past decade.

Industry funds collectively represent the dominant force in Australian superannuation by reach. Despite holding a smaller share of total assets than their combined retail counterparts (33.06% versus 19.3% by value), industry funds serve 58% of all super accounts — roughly 14.4 million Australians (Canstar).

Top 5 by size

AustralianSuper leads by a significant margin. The five largest funds by membership are:

The ranking below shows Australia’s five largest superannuation funds by membership as of end 2024.

Industry fund leaders

Beyond AustralianSuper, the ISA network includes funds such as HESTA (health and community services), Cbus (construction and building), and Hostplus (hospitality, sport, and recreation), each targeting specific industry workforces but open to all Australians. HESTA recorded the highest member satisfaction score among industry funds at 54.5%, followed by Cbus at 52.2% (Investor Daily).

For the majority of Australians who have never consciously chosen a super fund — and whose employer selected their fund — the probability is high that they are already members of an industry super fund, particularly if they work in healthcare, construction, or hospitality.

According to financial analysis firm PSK, FY25 marked a turning point for superannuation performance: for the first time in several years, many retail funds outperformed their industry peers. AustralianSuper, the fund itself, notes that industry super funds are not-for-profit and return any profits to their members, and that choosing the right super fund should be made with a long-term view.

The broader picture does not shift easily. Despite the FY25 reversal, industry super funds hold a third of Australia’s super assets, serve the majority of super accounts, and continue growing market share. FY25 was an exceptional year for listed markets — one that exposed the vulnerability of industry fund unlisted asset portfolios to valuation scrutiny — rather than a structural indictment of the member-owned model. For members with long investment horizons, the question is whether the FY25 retail outperformance reflects a durable shift or a temporary market cycle. The weight of evidence across ten, fifteen, and twenty-year periods still favours industry funds on average.

“FY25 was a turning point for superannuation performance”

— PSK Insights, Financial Analysis Firm

“For the first time in several years, many retail funds outperformed their industry peers”

— PSK, Analyst

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Among industry super options like AustralianSuper, the top 10 performing super funds reveal stark performance gaps that can boost retirement outcomes by tens of thousands.

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