Since the emergence of “Modern Portfolio Theory” and the “Capital Asset Pricing Model” in the late 1960s, institutional investors have taken a quantitatively driven approach to portfolio construction, looking to create portfolio diversification and obtain better risk-adjusted returns by balancing their asset-class exposures. This journey has seen several important advancements in thinking about how to optimally achieve desired results.
Funds that want to take the total portfolio approach first need to get the total portfolio view. To do that they not only need data – and lots of it – but a rock-solid understanding of exactly how they’re going to use it.
Chant West win for Aussie Super a win for all funds
In a year of bad-news headlines for the super industry, it was fitting that the biggest fund, the quintessential industry fund, took out the ‘Fund of the Year’ award from Chant West.
AustralianSuper, the bellwether fund and champion of the not-for-profit sector, also won the ‘Best Fund of the Year: Investments’, an increasingly difficult task because of its $220 billion in assets. Its MySuper option is the number one performer of all funds – including commercial funds – over 5, 10, and 15 years.
The ninth annual Chant West Awards, held at a sell-out dinner of 300 in Sydney on May 26, remained at capacity despite a Victorian state lockdown scare. For most of the other awards, it was a close tussle between Sunsuper, last year’s Fund of the Year, QSuper, last year’s Pension of the Year, and UniSuper, last year’s Best Fund: Advice Services. AustralianSuper did not win any of the 12 awards last year.
Mark Delaney, AustralianSuper CIO, said: “Super gets a lot of scrutiny; it’s right in the limelight. And we need to demonstrate our efficiency, integrity and the excellent outcomes we deliver to members.”
Ian Fryer, Chant West general manager, said that the finalists for the ‘Fund of the Year’ award ticked all the boxes to do with governance, investments, fees, insurance and service factors.
“Plus, they all showed resilience when things got tough,” he said. With AustralianSuper, the fund had “scale like no other”. Its net cashflow for 2020 was about $17 billion. With the two runners up, out of a finalist list of 10 funds, the $85 billion Sunsuper had net cashflow of $9 billion and the $95 billion UniSuper, had cashflow of $2.5 billion.
UniSuper won the ‘Pension Fund of the Year’ award in a top-three selection with Aware Super and QSuper. The $120 billion QSuper, which is advanced with plans to merge with Sunsuper, this year launched a lifetime pension product – the first of its kind among super funds.
QSuper won the ‘Best Innovation’ award for the product earlier in the evening and came second to Colonial First State First Choice for the ‘Best Fund: Longevity’ award.
Jason Murray, QSuper’s chief of member experience, said after the awards presentations: “Our members are our purpose. QSuper has been uniquely positioned to adjust quickly to the unfolding needs of our members and customers in the past 12 months.
“We aim to provide our members with more certainty and confidence in retirement. Regardless of the changing world around us, we continue to deliver on our promise to give members a regular income in retirement while we focus on growing their savings…”
Kevin O’Sullivan, set to retire from UniSuper in three months, told the audience that this would be his last Chant West awards night. His replacement was also announced last week – the appointment of industry veteran Peter Chun. Chun was most recently group executive, member growth, at Aware Super. Before that he spent about 10 years at Colonial First State in roles spanning product, distribution and investments.
O’Sullivan said: “I got up here for my first Chant West award at the first awards night. It’s now in its ninth year. If you can indulge me, I feel so fortunate to work with all the people I’ve worked with and for such a strong industry as well. If we could get rid of some of the vested interests it would be even better.
“It would be remiss of me to not praise John Pearce and his investment team. I’m sure he was a very close second to Mark [Delaney] and his team for ‘Best Fund: Investments’… I thank the whole industry for being so resilient over the past year.”
The two awards which tend to be a good predictor of short-listed finalists in ‘Fund of the Year’ are ‘Best Fund: Investments’ and ‘Best Fund: Member Services’. This is because those two capabilities have the highest weighting in the Chant West ratings system. Investments account for 40 per cent of the total and member services 30 per cent.
For investments, won by AustralianSuper, the two others of the top three finalists were Cbus and UniSuper. The Cbus CIO, Kristian Fok, heads a team of 115. It has built up its internal management to about 35 per cent of the total of $62 billion. UniSuper CIO, John Pearce, heads a team of about 50 with 75 per cent of assets managed internally. UniSuper has the lowest allocation to unlisted assets of the major funds, representing about 6 per cent of its portfolio. Its balanced fund option is the top performer in its category over the long term.
For ‘Best Fund: Member Services’, the top three of the finalists were AMP, QSuper and Sunsuper. Ian Fryer said of the winner, Sunsuper, that it had for many years led the way with personalised communications with its members. During the worst of covid-19 last year, it had helped members with reassurance and an integrated email campaign and videos.
David Wright, co-founder and chief executive of Zenith Investment Partners, the parent company of Chant West, said: “From time to time the industry gets some pretty rough treatment from the media and it is important to celebrate our successes.
“There is a number of you in the room looking to go public offer. Why wouldn’t you? You have the recognisable brands. Advisers need the funds to be rated. You know you are in a very good position [to compete]. So, why not go head to head on that basis?”
The award winners in all categories are:
- Fund of the Year – AustralianSuper
- Pension Fund of the Year – UniSuper
- Corporate Super Fund of the Year – Sunsuper
- Advised Product of the Year – Netwealth
- Best Fund: Investments – AustralianSuper
- Best Fund: Member Services – Sunsuper
- Specialist Fund of the Year – Cbus
- Best Fund: Insurance – Australian Catholic Super
- Best Fund: Integrity – Cbus
- Best Fund: Innovation – QSuper
- Best Fund: Longevity – CFS First Choice
- Best Fund: Advice Services – Sunsuper.
Note: All photos taken by Jason Nichol on behalf of Chant West.
