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Bias towards overseas shares pays off for REST
REST Industry Super attributes its strong returns in its core option to an emphasis on overseas shares after it was recognised as the top performer in 2013.
Chief executive Damian Hill said the fund's overweight position to shares, and leaning towards overseas shares relative to Australian shares in particular, helped its returns, as overseas shares outdid Australian share performance.
"The valuation for overseas shares was more attractive relative to Aussie shares and other relevant asset classes," Hill said.
"In addition it allows us to diversify the portfolio from risks in Aussie shares that have significant exposure to the resources sector, which is dependent on China's economic prospects."
Hill added that the fund's exposure to foreign currency (around 22 per cent of the fund) also helped as the Australian dollar fell (-14 per cent in 2013).
"At the time, the high level of the Australian dollar provided some level of downside protection for unhedged equities. If poor outcomes occurred in overseas equities market, the downside was going to be partly offset by a drop in the Australian dollar," he said.
Super Ratings ranked REST Super's Core strategy the best performer over 2013, with a return of 19.7 per cent. It came second over a five-year period, with a 10.5 per cent return.
Chant West's superannuation fund performance survey said industry funds outdid retail funds in 2013 despite share market exposure that usually benefits master trusts. Industry funds finished at 17.4 per cent, while retail finished at 16.9 per cent.
Hill said this was due to industry funds' exposure to lower allocation to shares and higher allocation to unlisted assets such as property and infrastructure.
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TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
GAM LSA Private Shares AU I
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2
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32.63 3 y p.a(%)
3
Fidante Credit Suisse Global Private Equity
32.16 3 y p.a(%)
4
Global X GlobalX FANG+ ETF
28.28 3 y p.a(%)
5
Plato Global Alpha A
27.76 3 y p.a(%)
