For most Australian super funds, January has already erased the earnings of the financial year to date and beyond. But the members of some funds have more to gripe about than others, according to research house SuperRatings.
While most balanced options appear similar, the difference between performance in the top and bottom balanced options during 2007 ballooned to over 10 per cent, with some funds delivering more than 5 per cent lower returns than the median, a SuperRatings report said. Jeff Bresnahan, managing director of SuperRatings said that people were entering into a balanced options assuming that they were all they same. “[But] when you have some funds delivering 6 to 7 per cent lower returns year on year, there is clearly a big difference.” Bresnahan attributed the greater range of returns to a growing disparity in the asset allocation between super funds. But some funds clearly have an inferior investment process, he said, as they have also had long-term underperformance in Australian equities. Bresnahan said the ongoing search for alternative assets by some funds and not others has led to the underlying assets looking decidedly different. Members who have found themselves in an underperforming fund have a reason to feel cheated, he said. “From a consumer’s point of view they look disturbingly similar, with similar stated objectives and risk profiles.”
Future Fund chief investment officer Ben Samild said that FY24 has been a great year for alpha creation, thanks to strong returns in equities and, unusually, across multiple hedge fund strategies all at the same time. He reflected the past few years have been “a difficult time to be an asset owner and to generate positive returns for risk assets” but the Future Fund is tracking well of its long-term mandate.
Simon Hoyle and Darcy SongSeptember 4, 2024
