POWERED BY MOMENTUM MEDIA
Choice a bigger risk than defaults says ISA
The strongest determinant of performance for superannuation fund members is not simply scale, but the commercial model and profit orientation, according to Industry Super Australia (ISA).
ISA has used a submission to the Productivity Commission (PC) to once again stress its belief that industry funds outperform their retail counterparts.
Pointing to previous questions posed by the PC, the ISA noted that it had asked whether the greatest risk a member faced in superannuation was being defaulted into a poor-performing product.
It claimed this was not true, and that the statistical evidence showed “that the greatest risk to a member is being sold into a choice product”.
“The degree of risk is a function of the probability of a harm (in this case, low net returns), and the magnitude of that harm (in this case, the degree to which the returns are low),” the ISA submission said.
While acknowledging that some default funds fell into the bottom quartile in terms of net returns, the ISA submission argued that more than two-thirds had achieved returns in the top quartile.
“This means that, probabilistically, there is greater than a two-in-three chance that an account that was established through the default system will have received top quartile long-term net returns,” the submission said.
Recommended for you
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.
Specific valuation decisions made by the $88 billion fund at the beginning of the pandemic were “not adequate for the deteriorating market conditions”, according to the prudential regulator.
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(%)
