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Which super fund has the best capital preservation?
QSuper Balanced superannuation fund is the best at capital preservation when it comes to balanced funds as it has the lowest maximum drawdown figures and has low volatility, according to FE Analytics.
Under the Superannuation Industry (Supervision) Act (SIS Act), super funds are required to achieve capital preservation as one of its objectives. Super Review used FE Analytics to find out which balanced super funds were the best at capital preservation.
The QSuper Balanced fund over the three years to 31 October, 2019, had the lowest maximum drawdown of -1.72%, was placed in the top quartile for an annualised return of 8.7%, and was the fourth least volatile fund out of 184 balanced super funds.
Balanced super funds with the lowest drawdown over the three years to 31 October 2019
|
Fund |
Max drawdown |
Return (annualised) |
Volatility |
|||
|
QSuper Balanced Option |
-1.72%
|
Quartile 1 |
8.67% |
Quartile 1 |
2.7 |
Quartile 1 |
|
Australian Conservative Option |
-2.3% |
Quartile 1 |
5.82% |
Quartile 3 |
2.42 |
Quartile 1 |
|
Sunsuper Retirement Pool |
-2.35% |
Quartile 1 |
8.22% |
Quartile 1 |
2.81 |
Quartile 1 |
|
Sunsuper Retirement Option |
-2.37% |
Quartile 1 |
8.31% |
Quartile 1 |
2.84 |
Quartile 1 |
|
NGS Balanced Option |
-2.47% |
Quartile 1 |
7.8% |
Quartile 1 |
2.79 |
Quartile 1 |
Source: FE Analytics
The QSuper Balanced fund was also given a five Crown rating – a quantitative rating made up of alpha, relative volatility, and a consistently good performance over at least three years. The top 10% of funds were assigned five Crowns.
According to its factsheet, the fund has its highest asset allocation towards equities at 35% (6.7% to Australian shares and 22.4% to international shares), followed by fixed interest at 23.8%, infrastructure at 14.5%, and cash at 13.1%. The data also found that the fund only experience seven negative periods over the three years.
Its top three allocation towards Australian shares were CSL Limited, Transurban Group, and the Commonwealth Bank of Australia. On the international side, the top three allocations were Taiwan Semiconductor, Samsung Electronics, and Anheuser-Busch.
While Australian Conservative Option had the second lowest max drawdown of -2.3% and had the lowest volatility, its return took a hit and was placed in the third quartile at 5.8%. The fund was only given two Crown ratings.
On the flip side, the two funds with the highest max drawdown, lowest annualised returns, and highest volatility were ANZ OA Super MoneyForLife Index Balanced DEF and Macquarie Super Plan BT Wholesale Balanced Returns.
Balanced super funds with the highest max drawdown and highest volatility
|
Fund |
Max drawdown |
Return (annualised) |
Volatility |
|||
|
Macquarie Super Plan BT Wholesale Balanced |
-6.71% |
Quartile 4 |
5.61% |
Quartile 4 |
4.32 |
Quartile 4 |
|
ANZ OA Super MoneyForLife Index Balanced DEF |
-6.5%
|
Quartile 4 |
5.64% |
Quartile 4 |
4.59 |
Quartile 4 |
Source: FE Analytics
However, these two funds placed in the second and third quartile for most negative periods. The ANZ fund experienced 10 negative periods and 12 for the Macquarie fund. Out of the 184 funds, the largest number of negative periods was 14 over the three years.
The ANZ fund was given one Crown rating while the Macquarie fund was given two Crowns.
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