UniSuper's head of equities, Simon Hudson

UniSuper’s $26 billion balanced fund topped Chant West’s best performance list for 2019 thanks to its high allocation to listed equities.

The fund returned 18.4 per cent last year compared to median increase of 14.7 per cent for growth funds across the industry. Overseen by Unisuper’s head of equities, Simon Hudson, about 60 per cent of the portfolio is invested in the stockmarket including 38 per cent in Australia.

“The better performing funds were generally those that maintained higher allocations to listed shares, which had a terrific year,” said Chant West’s senior investment manager Mano Mohankumar. “Shares remain the main contributors to growth fund performance with about 53 per cent allocation on average.”

The results come as the Australian share market extended its record high above 7,000 in January, fuelled by a trade deal between the US and China. That’s on top of a 24 per cent rally in 2019. Hudson said in October that the longest equity bull market in history “still has a way to go.”

Tasplan’s balanced fund came in second with a return of 17.6 per cent for 2019. It has allocated 23.5 per cent of the portfolio to Australian shares and 27.5 per cent to international stocks. Colonial First State’s FirstChoice Growth fund came in third with a 17.4 per cent return, closely followed by the balanced funds of Australian Ethical Super and AustralianSuper, the country’s largest fund.

Mohankumar said funds also benefited greatly from having money invested in listed real assets thanks to double digit returns for global-listed infrastructure, property and Australian real estate.

Over 10 years, Hostplus’s Balanced fund topped the list with a return of 9.2 per cent, followed by AustralianSuper and UniSuper.

Australia’s $2.9 trillion superannuation industry has the highest allocation to equities among the world’s seven largest pension fund markets at 47 per cent, according to Willis Towers Watson. That compares to the average allocation among the P7 at 40 per cent.

Sarah Jones is the deputy editor of Investment Magazine. She previously worked for Bloomberg News in London for more than 12 years covering equity markets and global asset management. Prior to moving to the UK, she worked for Australian Associated Press in Sydney covering economics and monetary policy.
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