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Forget best in show, APRA is focused on cellar dwellers
The Australian Prudential Regulation Authority (APRA) has signalled it is more interested in getting rid of the superannuation industry’s performance cellar dwellers than focusing on the “best in show” concept flagged in the Productivity Commission’s final report.
APRA deputy chair, Helen Rowell, made the point clear to an Australian Institute of Superannuation Trustees (AIST) forum when she said that while much debate had centred around the PC’s “best in show” concept, “APRA’s focus, on the other hand, has been at the other end of the spectrum: weeding out the industry’s under-performing tail.”
Rowell said that it was within this under-performing tail that most damage to members’ interest was being done.
“The bulk of superannuation funds from all sectors perform well – as the Productivity Commission noted ‘the majority of members and assets in the system are in products that have performed reasonably well’,” she said.
“However, too many members are invested in funds that consistently deliver sub-par outcomes, potentially reducing members’ retirement incomes by hundreds of thousands of dollars over a working life.”
Rowell claimed that a lack of transparency and the complexity had been created by the sheer number of products and options on offer and this had hindered member engagement, and made it much harder to assess performance across the full spectrum of the industry.
“By collecting and publishing a wider range of more granular data, APRA will make it much clearer to all stakeholders which trustees need to lift their game, and where,” she said noting that APRA would be implementing its member outcomes policy from 1 January, 2020 including publishing heatmaps providing an assessment of all MySuper products.
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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(%)
Once again we have APRA making a goose of themselves. Out right performance is not a measure in any sense of the work without a clear understanding of the risk measures @play.
it is bordering on infantile to suggest otherwise - I have clients that don't give a rip what their return is other than their money is safe. And being manged by a grown-up as distinct from morally bankrupt shyster. Without knowing what the risk-return metrics are - and the individual client's expectations these are nothing more than Ivory tower --"we know what's best for you" - for example - when the client says they want a balanced fund - they are not in the game of semantics and obfuscation - they want an equal mix of transparent defensive assets and clearly transparent growth assets. not a sliding 80/20 mix set by a politically active and left-leaning investment committee.