POWERED BY MOMENTUM MEDIA
Cost-cutting likely to result in bland MySuper funds
MySuper products are likely to turn out to be bland asset allocation products, since superannuation funds will struggle to differentiate MySuper funds from their current offerings and their pricing structures.
HLB Mann Judd senior manager of superannuation, Neil Howard, believes many retail super products were built with an enormous range of investment choices with different cost layers attached, and super funds couldn’t use them as a guide on how to create a cost-effective MySuper product.
Super funds were likely to create a MySuper product with an entirely bland asset allocation strategy as a result, Howard said.
It is still unclear as to how the Australian Prudential Regulation Authority will determine what is an appropriate level of cost for a Mysuper product.
Howard said it was currently entirely up to individual trustees to set up their own investment strategy and fee structures for Mysuper.
REST Super chief operating officer Paul Sayer said his company was unclear about the approach the Government would take to MySuper, since the scheme didn’t seem to fit the model of master trust corporate offerings with multiple pricing structures.
REST’s Core Investment Strategy within its industry fund division seemed to “tick the MySuper Boxes” but it was hard to say how they would develop a MySuper solution without knowing how the regulations would be structured, Sayer said.
Recommended for you
Vanguard Super has reported strong returns across most of its investment options, attributed to a “low-cost, index-based approach”.
The fund has achieved double-digit returns amid market volatility, reinforcing the value of long-term investment strategies for its members.
Australian super funds notched a third consecutive year of strong returns, with the median balanced option delivering an estimated 10.1 per cent over the 2024-25 financial year, but an economist has warned that the rally may be harder to sustain as key risks gather pace.
AustralianSuper has reported a 9.52 per cent return for its Balanced super option for the 2024–25 financial year, as markets delivered another year of strong performance despite the complex investing environment.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom 465 Calder Road Calder
99.46 3 y p.a(%)
2
DomaCom DFS Mortgage
95.46 3 y p.a(%)
3
Global X 21Shares Bitcoin ETF
78.55 3 y p.a(%)
4
BetaShares Crypto Innovators ETF
50.39 3 y p.a(%)
5
Global X GlobalX FANG+ ETF
47.50 3 y p.a(%)
