POWERED BY MOMENTUM MEDIA
APRA accused of inappropriate heatmap comparisons
The Australian Prudential Regulation Authority (APRA) has fallen into the trap of not comparing like for like when it produced its superannuation fund heatmaps.
What is more it had not looked at a core outcome – whether funds had achieved their investment return objective.
NSW-based energy industry superannuation fund, EISS Super chief executive, Alexander Hutchison said that while his fund welcomed APRA’s efforts to compare MySuper funds, it was clear that the methodology required further development before the heatmaps could be relied upon.
“Chief among EISS’ concerns is that APRA’s use of data did not present an apples and apples comparison of its MySuper product,” he said.
“Our concerns with respect to the publication of the APRA heatmap, that it is essentially a league table, have been realised. We are being compared to other MySuper funds that have a significantly larger exposure to growth assets, so it is not an apples and apples comparison,” Hutchison said.
He said EISS was surprised that the heatmaps didn’t look at whether funds achieved their investment return objective, essentially their promise to members.
“We exceeded our investment target for our MySuper product over three, five, seven and 10 years but it seems APRA wasn’t concerned whether funds were true-to-label and resorted to comparing investment performance against a complex cluster of generic benchmarks,” Hutchison said.
“We believe a better measure of investment performance is to consider actual risk adjusted returns taking into consideration the volatility of the MySuper option. We’re a lower risk, lower cost fund and have been compared with funds that take greater risk and should therefore be expected to deliver higher returns,” he said.
Recommended for you
Governor Bullock took a more hawkish stance on Tuesday, raising concerns over Trump’s escalating tariffs, which sent economists in different directions with their predictions.
Equity Trustees has announced the appointment of Jocelyn Furlan to the Superannuation Limited (ETSL) and HTFS Nominees Pty Ltd (HTFS) boards, which have oversight of one of the companies’ fastest growing trustee services.
Following growing criticism of the superannuation industry’s influence on capital markets and its increasing exposure to private assets, as well as regulators’ concerns about potential risks to financial stability, ASFA has released new research pushing back on these narratives.
A US-based infrastructure specialist has welcomed the $93 billion fund as a cornerstone investor.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Global X GlobalX FANG+ ETF
33.51 3 y p.a(%)
2
Spire Oaktree Opportunities XI Second Close
32.68 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.62 3 y p.a(%)
4
Spire Oaktree Opportunities XI First Close USD
31.36 3 y p.a(%)
5
Fidante Credit Suisse Global Private Equity
29.60 3 y p.a(%)
