POWERED BY MOMENTUM MEDIA
Are active managers earning their fees in super?
The Productivity Commission (PC) needs consider whether active fund managers are actually delivering value for the fees they charge in the context of superannuation, according to consumer group, Choice.
The consumer group has used its submission to the PC’s inquiry into superannuation efficiency and competitiveness to directly question the value being generated by active managers.
It said fee levels were likely to always be a key area of concern for consumers but added that “the point raised about high fees for active fund managers who don’t beat passively managed investments is worth repeating”.
The submission pointed to the SPIVA Australia Scorecard which showed that, over the 10-year period ending on 31 December 2016, more than 80 per cent of international equity and Australian bond funds and more than 70 per cent of Australian general equity and Australian real estate investment trusts (AREIT) funds underperformed their respective benchmarks.
“This begs the important question, what value do fund managers deliver for their fees?” it said.
The submission said Choice would like to see the PC further examine the value of active fund managers in superannuation as part of its analysis.
The call for the PC to examine the value of active fund managers, came as the Choice submission pointed to the concern of superannuation fund members about the erosion of balances due to multiple accounts and high fees.
“Choice sees solving these problems as a threshold issue against which any reform proposal should be judged,” it said.
Recommended for you
The proposed reforms have been described as a key step towards delivering better products and retirement experiences for members, with many noting financial advice remains the “urgent missing piece” of the puzzle.
Jim Chalmers has defended changes to the Future Fund’s mandate, referring to himself as a “big supporter” of the sovereign wealth fund, amid fierce opposition from the Coalition, which has pledged to reverse any changes if it wins next year’s election.
In a new review of the country’s largest fund, a research house says it’s well placed to deliver attractive returns despite challenges.
Chant West analysis suggests super could be well placed to deliver a double-digit result by the end of the calendar year.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.56 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
31.06 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.81 3 y p.a(%)
Re. : directly question the value being generated by active managers.
Who are these managers ??