POWERED BY MOMENTUM MEDIA
Personalised goal-based investing needed in super
The superannuation system will struggle to deliver adequate retirement outcomes for many Australians and a solution is to deliver investment strategies that address individual retirement goals, according to Russell Investments.
Russell Investment Australia managing director, Jodie Hampshire, pointed to World Economic Forum data that found Australia’s current retirement savings gap was US$1 trillion ($1.52 trillion) and this was expected to rise to US$9 trillion by 2050.
“A key weakness of our current system is its inability to deliver investment strategies that address individual retirement goals. Super funds are serving up one-size-fits-many approaches to investing that might look sensible on average, but in the real world, nobody is average,” she said.
“While MySuper has helped nudge people into higher growth default options, the contributions of a 25-year-old entering the workforce might still be invested in the exact same way as a 62-year-old nearing retirement.”
Hampshire noted that lifestyle and target data funds were a “step in the right direction” but that age-only strategies were designed for a group of individuals, instead of delivering an optimal outcome for every individual.
She said funds needed asset allocation that was more personalised to an individual’s own retirement goal and financial situation.
“Ultimately, we see that personalised, goal-based investing in super is the next big step to helping even more Australians achieve the retirement lifestyle they desire,” she said.
Recommended for you
Jim Chalmers has defended changes to the Future Fund’s mandate, referring to himself as a “big supporter” of the sovereign wealth fund, amid fierce opposition from the Coalition, which has pledged to reverse any changes if it wins next year’s election.
In a new review of the country’s largest fund, a research house says it’s well placed to deliver attractive returns despite challenges.
Chant West analysis suggests super could be well placed to deliver a double-digit result by the end of the calendar year.
Specific valuation decisions made by the $88 billion fund at the beginning of the pandemic were “not adequate for the deteriorating market conditions”, according to the prudential regulator.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.56 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
31.06 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.81 3 y p.a(%)
