Critics question why Hostplus was crowned Australia’s best balanced superannuation fund over one and 10 years, saying the rankings rely on unpublished valuations of unlisted assets akin to ‘‘marking your own homework’’.

Only three of more than 70 MySuper funds – the balanced options defaulted into by about 14 million workers – made money for members in the year ended June 30, says a SuperRatings report published by The Australian Financial Review on Friday.

Hostplus, the $82 billion hospitality industry super fund, topped the ranking with a return in its balanced option of 1.6 per cent. It also retained its spot as market leader over a 10-year outlook, with an average return of 9.7 per cent a year.

Sam Sicilia, the fund’s chief investment officer, attributed the result in part to investments in unlisted assets, especially infrastructure projects such as airports, bridges and seaports that had ‘‘monopolistic’’ and ‘‘inflation beating’’ characteristics that protected the portfolio against the global sell-off in bond and equity markets.

But some financial advisers, who under law are the only individuals who can recommend a consumer invest in a particular super fund, have questioned the role played by the valuations of these unlisted assets, which are done behind closed doors and are not released to members or the public.

Chris Brycki, founder of investment adviser Stockspot and a funds management market analyst, said members were ‘‘completely in the dark’’ about funds’ unlisted asset valuations.

‘‘Many funds never reveal either the frequency or methodology of the so-called independent valuations,’’ he said.

‘‘The problem here is that it’s highly questionable whether Hostplus have revalued all of their overweight unlisted assets . . . to reflect current public market valuations. It’s the same as someone marking their own homework and then bragging about being top of the class.’’

If Hostplus is overvaluing its private equity investments, which make up 8 per cent of the fund, then it could have an ‘‘overstated’’ impact on balanced returns, Mr Brycki added.

In May 2020, research house Lonsec (which owns SuperRatings) downgraded Hostplus’ balanced option from ‘‘recommended’’ to ‘‘investment grade’’. The Lonsec review found the fund suffered from ‘‘high, structural allocation to illiquid assets’’, ‘‘greater liquidity risks’’, and ‘‘management costs at the higher end’’.

Mr Sicilia said he was familiar with the criticism, and had been ‘‘attacked’’ on Twitter by some who believed the fund had too much exposure to unlisted and illiquid assets (meaning they are difficult or time-consuming to sell).

But he was adamant that unlisted investments were critical in defending member savings against the volatility in public sharemarkets.

‘‘I don’t care about liquidity,’’ he said, adding that he did care about ‘‘liquidity management. I don’t want the listed version. I want the unlisted version, with the expert valuation.’’

As the superannuation system matures, funds need to remain focused on how they value their assets, said SuperRatings executive director Kirby Rappell.

The firm receives returns from funds and monitors fund websites, and reviews information against public disclosures and its own data.

‘‘As part of our ratings review process, we seek to build an appropriate understanding of funds valuation processes and oversight,’’ said Mr Rappell.

Wealth adviser Steve Blizard, of Roxburgh Securities in Perth, said he did not trust industry funds when it came to closed-door valuations. He said league tables can be misleading as they rely on internal metrics and data.