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Returns not costing much in risk for top growth options
Many of the top performing superannuation funds’ growth options from the last three years have delivered on returns without compromising much on risk, data from FE Analytics has revealed.
Looking at the high growth options of the five funds to perform strongest in the recently calculated Super Fund Crown Ratings, they achieved returns in excess of 10 per cent while also largely only experiencing volatility of five to six per cent.
AustralianSuper’s high growth option, for example, delivered members with returns of 11.12 per cent for the three years to this February’s end, with volatility of 5.94 per cent and a Sharpe ratio of 1.28. Over 10 years, its risk increased slightly, with volatility hitting 6.37 per cent, but its Sharpe stayed low at 1.03 and its returns were over 10 per cent.
QSuper’s aggressive option showed similar results. Its three-year returns to 28 February were 10.22 per cent with relatively low volatility of 4.18 per cent and a Sharpe ratio of 1.61. As with AustralianSuper, its risk exposure jumped slightly over 10 years, recording returns of 10.96 per cent, volatility of 6.3 per cent and a Sharpe of 1.18 for the decade to February’s end.
Proving that they do well in more than just performance, other funds to do well under the Super Fund Crown Ratings also saw parallels to the above in their returns and risk exposure.
NGS Super’s high growth option delivered returns of 10.69 per cent with volatility of 5.32 per cent and a Sharpe ratio of 1.35 for the three years to last month’s end. Statewide Super’s high growth option showed 11.51 per cent, 5.74 per cent and 1.4 for returns, volatility and Sharpe respectively over that period, and AustSafe’s super growth option delivered 9.52 per cent, 6.05 per cent and 0.81 for those three metrics for the three years to January’s end.
These returns outperformed those of the sector average, delivering higher returns with lower volatility and a higher Sharpe, meaning the level of return above that of a risk-free investment was higher. The graph below charts this comparison
The Mixed Asset – Aggressive sector, which measures high growth superannuation options, experienced returns of 7.93 per cent, volatility of 6 per cent and a Sharpe ratio of 0.74 for the three years to this February’s end. Its ten-year performance similarly underperformed the above funds’ options, with returns of 8.16 per cent for the period while recording volatility of 6.4 per cent and a Sharpe of 0.73.
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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
31.73 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
30.15 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.71 3 y p.a(%)
