POWERED BY MOMENTUM MEDIA
Failed YFYS funds should be permanently closed: Stockspot
Superannuation funds which fail the Your Future, Your Super (YFYS) performance test should be pulled from the market, according to Stockspot.
In a submission to the Treasury’s YFYS consultation, the firm said other sectors would immediately have products recalled if they failed to meet their requirements.
However, for super funds, failure of YFYS only saw the fund closed to new members while existing members remained invested.
“In any other category (for example, medication) failing a performance test of this nature would lead to the product being recalled or pulled from the market.
“The fact that a significant amount of money has remained in these underperforming funds shows that there is a clear market failure. Super is not a category where consumers are making an informed choice. Members will often stay in a dud product due to a combination of confusion, friction or apathy.”
The view of Stockspot, which recently published its annual performance stats for super funds, was that products which failed twice should be permanently shut and members provided a tax-beneficial option to transfer to another fund.
“The current measures have been effective but there should be a stronger deterrent for underperformance.”
If the test was extended and improved in the future, Stockspot recommended members should be able to compare MySuper products, diversified choice products within risk categories and single asset funds covering major asset classes.
AUTHOR
Laura Dew
Laura Dew is editor at Super Review. Prior to joining SR, she spent five years working at Investment Week in the UK covering asset and wealth management.
Recommended for you
Delahunty has issued a fairly stern response to ASIC, defending super’s investments in private markets and urging the regulator to work with APRA to eliminate “duplicative regulatory requests”.
As super funds and private equity firms ramp up take-private deals, shrinking the ASX, the corporate watchdog is on high alert, especially with global consensus suggesting that the next financial crisis could stem from private markets.
Australian super funds are expected to invest trillions of dollars in international markets by 2035, with the US emerging as the top destination for these funds, according to a new report commissioned by IFM Investors.
Generation Life has backed new voluntary best practice principles aimed at improving retirement income solutions for Australians, despite opposition from parts of the financial services sector.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
32.68 3 y p.a(%)
2
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.78 3 y p.a(%)
3
Spire Oaktree Opportunities XI First Close USD
31.36 3 y p.a(%)
4
Global X GlobalX FANG+ ETF
30.80 3 y p.a(%)
5
Fidante Credit Suisse Global Private Equity
28.31 3 y p.a(%)
