As not-for-profit funds continued their monopoly of the top ten in the latest SuperRatings five-year performance tables, a Sydney University study into a possible link between governance model and performance is wrapping up in time for the Conference of Major Super Funds.
While the median balanced option lost 17.68 per cent in the year to January 1 (net fees and tax), the five year figure is still 4.68 per cent in the black – however the ten non-profit funds in the Top 10 were well above that.
The long reign of MTAA Super’s balanced option as best performer (8.7 per cent net compound returns over five years) has been tipped to soon end by some, given its large proportion of unlisted assets advised upon and sometimes implemented by Access Capital Advisers.
However SuperRatings chief, Jeff Bresnahan, said it was wrong to assume all unlisted assets would eventually suffer the same losses as their listed proxies.
"Interestingly, despite widespread fearmongering by some of significant negative revaluations of unlisted assets, funds appear to be experiencing both positive and negative results in this area. The quality of the asset is obviously paramount and funds holding better quality assets do not appear to being impacted at the present time. In fact those with high levels of unlisted assets continue to outperform those with little or no assets in this area," Bresnahan said.
The peak body for trustees of not-for-profit funds in Australia, the AIST, is keen to discover whether the model of representative trustee governance has contributed to the funds’ outperformance.
In conjunction with Sydney University, AIST is currently in the final stages of a research project that aims to better measure fund performance and improve understanding of the role of governance in performance.
The latest phase of the research, to be released at the upcoming Conference of Major Superannuation Funds (March 23-25) at the Gold Coast, will present an analysis of the performance of Australian super funds over the past four years, including the period of the sharp downturn in returns in the wake of the global financial crisis in 2008.
"A criticism of earlier performance research has been that the methodology used has not been adequate. This new research aims to overcome this challenge through the use of up-to-date and more reliable models of fund performance," according to an AIST spokesperson.
Dr Mike Rafferty, senior research analyst at Sydney University’s Workplace Research Centre sees performance measurement as a test of the risk-adjusted returns of funds, as well as the performance model employed.