UniSuper will offer accumulation members the ability to completely control the asset allocation of their account from mid-2008, rather than only offering them a choice of pre-mixed investment portfolios.
The $24 billion fund plans to introduce a “self-select domain” to all members of its accumulation fund – comprising roughly 60 per cent of UniSuper’s assets – according to UniSuper interim joint chief executive, Paul Murphy. Members who decide to self-select will be able to slice and dice their account between the eight pre-mixed portfolios already available to members, as well as four other asset classes: Australian equities, international equities, property and fixed income. Six of the eight pre-mixed portfolios are combinations of growth and defensive assets, starting from 100 per cent cash and moving up to high growth, which is 100 per cent growth assets. Two of the eight pre-mixes are socially responsible investment portfolios, in a choice of high growth or balanced . Murphy said fees for the self-select service had not yet been settled upon; however, he expected there would be an additional fee for self-selecting members, to ensure the extra administration required was not subsidised by members who didn’t use the service. “It will be a cost recovery thing. We’re not aiming to make any windfall revenue,” he said. Murphy said extra communication and education of self-select members would be in place to ensure those who took up this option were made aware of its demands and the “need for vigilance”. Murphy expected take-up of self-selection to be “;reasonably modest”, so no extra staff would be required to implement or service the new offer. The driver behind self-select is to give members more options without over-servicing this demand and “paralysing” the member with choice, Murphy said. “We’re not in the same game as commercial master trusts, who make a virtue out of charging a lot more money for access to a larger range of choices. It’s just about making a balance between facilities we make available. And it’s partly driven by cost efficiencies,” he said. Meanwhile, UniSuper chief investment officer (and interim joint CEO) David St. John said the fund was “;in the final throes”; of appointing a consultant for direct offshore property. St. John hoped the consultant would be appointed and the first commitments made on its advice by June 30. UniSuper has used Altius Associates to advise on its direct offshore private equity program for more than two years.
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
