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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.
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TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
36.43 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
35.08 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.72 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
29.60 3 y p.a(%)
5
Global X GlobalX FANG+ ETF
27.64 3 y p.a(%)
