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Consistent funds come out on top in new Super Fund Crown Ratings
Consistency has seen mid-sized funds come out on top in the first round of the newly launched Superannuation Fund Crown Ratings, a quantitative rating system launched by data company, FE.
The list of funds to proportionately have the most top-rated options, shown in the table below, is dominated with mid-size funds. With the exceptions of AustralianSuper and REST Super at the larger end and BUSSQ Building Super and AustSafe Super at the smaller, it’s largely the superannuation providers whose number of offerings and funds under management (FUM) hover in the middle of the road that have done well.
Top 15 superannuation funds for highest % of options to receive 5 Crowns
|
Group |
% of options for 5- Crowns |
|
NGS Super |
75 |
|
AustSafe Super |
67 |
|
QSuper |
60 |
|
Statewide Super |
60 |
|
Sunsuper |
59 |
|
First State Super |
58 |
|
Australian Super |
50 |
|
BUSSQ Building Super |
50 |
|
Energy Super |
50 |
|
VicSuper |
50 |
|
CARE Super |
45 |
|
Legal Super |
42 |
|
REST Industry Super |
42 |
|
EISS Super |
40 |
|
Telstra Super |
40 |
Considering the emphasis of the Australian Prudential Regulation Authority (APRA) and of some larger providers on scale, this is worth noting.
While some of the larger providers had high numbers of four and five Crown options, this was offset by equal amounts of one and two Crown ones. This doesn’t really show strength then, as they struggled as much as they succeeded. Another interesting perspective on scale, then.
There was also little to separate many of the options offered by these top 15 funds.
The chart below, for example, shows the returns of the top ten of these funds’ MySuper options over the last three years (as that’s the performance period upon which the Crowns were determined). The difference in returns between the best-performing, Sunsuper’s Balanced option, and the lowest, Energy Super’s MySuper option, was less than five percentage points.
Considering that most of these products have longer investment horizons, this is a negligible difference. Again, consistency is a recurring theme.
Beyond the Crowns themselves, FE has also created peer group missed asset indices. Reflecting that the superannuation industry isn’t managed the same way as traditional investment funds are, the indices seek to provide a benchmark for superannuation fund performance.
Speaking on the benefit of the indices in light of the Crowns’ overarching goal of better informing the public and industry on superannuation fund performance, FE’s head of data for Australia, Stuart Alsop, said: “Being able to asses a fund/product option based on a benchmark of their peers aids with comparability and assists the member in making a more informed decision.”
All of the MySuper options looked at in chart above, for example, also fit into one of these indices. This means that for members going into a fund’s default option, they can better assess the performance of that option against its peers.
The ratings are based on alpha, volatility, and consistency and strength of performance, measured across the three years prior to each rebalancing, which will occur biannually.
Specifically, the ratings identify funds that have displayed superior performance in terms of stock-picking, consistency of outperformance against a credible benchmark, and achievement of results at a relatively low risk.
The top 10 per cent of options were rewarded five Crowns, the next 15 per cent four Crowns, and each of the remaining three quartiles were given three, two, and one respectively.
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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(%)
