POWERED BY MOMENTUM MEDIA
Mega super funds on the horizon
The superannuation sector will see the emergence of mega super funds in the future, according to EY, as consolidation becomes crucial to achieve scale.
Last month, Hostplus, which had $66 billion in funds under management, announced it would be merging with Intrust Super and was also in talks with Statewide Super.
Meanwhile, LGIAsuper and Energy Super merged to create a $22 billion super fund at the start of this month.
Overall, the largest super fund by assets under management was AustralianSuper which held $191 billion.
Rita Da Silva, Oceanic head of asset and wealth management at EY, said: “We do think there will be more to happen in superannuation, we will see the emergence of mega super funds and more consolidation.
“For super funds, scale is essential to bring down costs so they are having to think more broadly about how they can grow.”
The possibility of mega super funds also presented problems for asset managers as it would be more likely that a larger firm would opt to bring more and more of its investment management in-house, reducing the amount managed by asset managers. It could also reduce the number of asset management talent as people opted to work at the super funds instead.
Da Silva added the sector could also see the arrival of new players such as index fund provider Vanguard which announced plans to launch a super fund earlier this year.
“There will also be new entrants, Vanguard is bringing a disruptive energy to super with a different focus. They have already said they will be taking a look at the space but it is still to be determined how it will play out,” she said.
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
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.
The profit-to-member super fund’s MySuper default option has returned 9.85 per cent for the financial year 2024–25.
Colonial First State (CFS) has announced solid double-digit returns for its MySuper balanced and growth equivalent funds during the financial year.
The super fund’s Future Saver High Growth option delivered an 11.9 per cent return for the financial year 2024–25, on the back of a diversified portfolio and actively managed investment strategy.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
92.15 3 y p.a(%)
2
Global X 21Shares Bitcoin ETF
53.24 3 y p.a(%)
3
Global X GlobalX FANG+ ETF
43.15 3 y p.a(%)
4
DomaCom Shoreline North Coogee
36.26 3 y p.a(%)
5
GAM LSA Private Shares AU I
35.87 3 y p.a(%)
