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
Future Group is set to take on nearly $1 billion in funds under management (FUM) and welcome more than 100,000 new members following two significant successor fund transfers.
Insignia’s Master Trust business suffered a 1.9 per cent dip in FUA in the third quarter, amid total net outflows of $1.8 billion.
While the Liberal senator has accused super funds of locking everyday Australians out of the housing market, industry advocates say the Coalition’s policy would only push home ownership further out of reach.
Australia’s largest superannuation fund has confirmed all members who had funds stolen during the recent cyber fraud crime have been reimbursed.
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(%)
