POWERED BY MOMENTUM MEDIA
PC chastened over fund performance methodology
The Productivity Commission (PC) has again been taken to task over its approach to superannuation investment performance – this time by the Association of Superannuation Funds of Australia (ASFA).
In a submission responding to the PC’s Supplementary Paper on Investment Performance, the ASFA has expressed concern about the commission’s approach, particularly around the benchmarking of individual fund/product performance.
Barely a week after actuarial research house, Rice Warner questioned the PC’s approach, the ASFA submission said it considered that “numerous caveats/limitations stem from the Commission’s data and benchmarking methodology”.
“Together, these caveats/limitations suggest there is a significant margin of error around any threshold for ‘underperforming’ funds or products,” it said. “Nonetheless, the Commission defines underperformance as a very small deviation from what is an approximate threshold.”
“In addition, in terms of forward-looking performance assessment, the Commission’s current analysis shows that measures of short-term investment returns are not a reliable predictor of long-term performance,” the submission said.
“ASFA considers there would be risks around applying the Commission’s current approach to any selection process for funds or products,” it said. “ASFA is concerned about underperformance and the impact on consumers.”
However, the submission said that given these issues, ASFA considered it would be difficult to draw definite conclusions as to whether particular funds/products were “underperformers”.
“In this regard, there is a risk that funds/products would be designated as ‘underperforming’ despite having the potential to deliver high returns over the long term,” the ASFA submission said.
Recommended for you
A US-based infrastructure specialist has welcomed the $93 billion fund as a cornerstone investor.
Qantas Super has officially merged with ART over the weekend, with its CEO describing the “bittersweet” decision as being in the best financial interests of its members.
The super sector has apologised and vowed to fix widespread delays, poor service, and systemic failures in processing death benefit claims, following an ASIC review.
Long-term investors face a critical decision – stay the course or pivot, says leading economist Shane Oliver.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Global X GlobalX FANG+ ETF
33.51 3 y p.a(%)
2
Spire Oaktree Opportunities XI Second Close
32.68 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.62 3 y p.a(%)
4
Spire Oaktree Opportunities XI First Close USD
31.36 3 y p.a(%)
5
Fidante Credit Suisse Global Private Equity
29.60 3 y p.a(%)
