The legitimacy and social licence of superannuation will be at risk if funds do not remain relevant, competitive and trusted by the communities they serve. The future fund CEO will need a stronger external focus, taking on a “chief community engagement” role.
April might have been a market bloodbath, but Australia’s super funds have come out of it with barely a drop on them – and it shouldn’t be surprising.
AMP’s returns for the year ended June 30 were driven by some key tactical moves and frequent rebalancing. But its quantitative dynamic asset allocation model also weighed in, delivering some of its best returns on record. AMP head of portfolio management Stuart Eliot says one of the most important things the fund did during the year was to “trust the model”.
The retail fund delivered double-digit returns to its members by arming itself for the exact investment environment it’s just experienced. But chief investment officer Jonathan Armitage expects returns to moderate from here.
Having learned the first time around that it’s better to react to what US President Donald Trump does rather than to what he says he’ll do, MLC Asset Management chief investment officer Dan Farmer says the best decision of all in the financial year just past was to be ‘boring’.
It was “a good year to be invested here” for the $330 billion Australian Retirement Trust, which has leaned on domestic quiet achievers – and some less quiet achievers – to power its returns.
Relying on super funds to fully embrace their obligations under the Retirement Income Covenant (RIC) will leave significant parts of the industry wallowing with partially developed retirement income strategies a decade after the RIC was introduced. Policymakers and regulators need to do more to help move the industry forward or risk the process slowing to a crawl.
When it comes to retirement, simple questions can have complex answers. UniSuper is leaning on an army of financial advisers to help its members out, and contemplating a change to its longevity solution too.
As insurance and member service woes percolated in the background, the CEOs of Australia’s biggest super funds took home millions in base pay and bonuses.
Ten chief investment offers pulled in total remuneration of $1 million or more in 2023-24, with UniSuper’s John Pearce topping the charts. The pay packets of CIOs reflect not only how the performance of the teams they lead translates into investment returns for members, but also the increasing complexity of leading those teams and managing the demands placed upon them.
A good superannuation fund chair knows when to step up and be the public face of the fund, and when to leave the front-running to other executives and management. But as scrutiny on the sector becomes more intense and as funds face continuing growing pains, it’s likely that chairs will find themselves in the spotlight more frequently, meaning that more than ever before they’ll really earn their money.
The country’s largest super fund says that private markets aren’t “inherently riskier” and that the current approach to regulation and data collection for super funds should be maintained even as ASIC and APRA focus more closely on how they invest in opaque and illiquid assets.
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Investment Magazine provides in-depth, monthly analysis of trends and developments for all the businesses in which superannuation funds engage‚ including asset allocation, investment manager selection, custody and fund accounting, member administration, group insurance and compliance.
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