POWERED BY MOMENTUM MEDIA
Industry funds lead way in 2018
Superannuation funds managed to eke out a positive return for calendar year 2018, according to the latest analysis released by superannuation funds research and ratings house, Chant West.
The analysis said the average 0.8 per cent return may have been the lowest since 2011 but had served to extend the run of positive years to seven.
Chant West said QSuper had taken top spot in terms of returns, recording 2.8 per cent but that while the median growth fund return was in the black there were several in the category which had delivered negative returns, with the worst performer losing 2.5 per cent.
Commenting on the analysis, Chant West senior investment manager, Mano Mohankumar said the 2018 result was not surprising given the stellar run experience by funds since 2009 with the median growth fund averaging close to nine per cent.
He said the better performing funds in 2018 were those that had relatively higher allocations to unlisted assets such as infrastructure, property and private equity and to bonds at the expense of shares.
Mohankumar said having a higher proportion of your international shares unhedged would have also helped because the depreciation of the Australian dollar turned the unhedged loss of 7.5 per cent for that sector into a 1.5 per cent gain in unhedged terms.
Source: Chant West
Recommended for you
The chief executive of superannuation advocacy body ASFA has laid out the sector’s expectations for Australia’s next government, underscoring the need for policy stability to safeguard members’ retirement savings.
Aware Super has made a $1.6 billion investment in a 99-hectare industrial precinct in Melbourne’s North which, the fund clarified, also houses the nation’s first privately funded open-access intermodal freight terminal.
ASFA has affirmed its commitment to safeguarding Australia’s retirement savings as cyber activity becomes an increasing challenge for the financial services sector.
The shadow treasurer is not happy with the performance of some within the super sector, telling an event in Sydney on Thursday that some funds are obsessed with funds under management, above all else.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
90.28 3 y p.a(%)
2
GAM LSA Private Shares AU I
37.08 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.44 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
31.12 3 y p.a(%)
5
Global X GlobalX FANG+ ETF
28.28 3 y p.a(%)
So some of the industry super outperformed to their high exposure to direct property and infrastructure? This is not true market value and inflates performance artificially. Valuation is via a discounted calculation. These superannuation funds could have a problem with liquidity if there was a run. Think of MTAA during the GFC. Comparing superannuation funds with high liquidity and true market valuation with potentially illiquid industry funds is not really comparing apples with apples. There is also the issue of industry designating their direct growth investments as defensive therefor creating a misrepresentation of the inherent risk of the investment.