APRA

As funds get bigger and bigger – and the Your Future Your Super (YFYS) performance test bites – they’re rethinking everything from alpha generation to their intrinsic investment philosophies. While the increasing size of super funds will benefit them in unlisted markets – where big funds can increasingly play on the same field as global…

To fix the Your Future, Your Super (YFYS) performance test, Treasury and regulators need to reconsider their fixation on a “bright line” measure. It’s a testament to the flaws of the YFYS performance test that, several months after it was first applied to MySuper products, the super sector’s intelligentsia are still trying to fix it….

A mere 13 funds were dispatched by the first round of the Your Future Your Super (YFYS) performance test. Chant West believes the damage could be worse in the choice sector. Later this year, APRA’s performance test will be brought to bear against the choice sector after a dry run on the smaller universe of…

In the aftermath of Your Future Your Super (YFYS), members of dud funds still aren’t moving their super. And it’s not clear what the government and regulators can do about it. It sometimes seems that so much time was spent on implementing the contentious YFYS reforms that the question of what would happen to members…

While profit-to-member funds have been given the go-ahead to build reserves from new fees on members, Equity Trustees believes that fund shareholders should pony up instead. The issue of so-called “$12 trustees” has leapt to prominence in recent months as super funds flocked to courts to get the green light to build capital reserves through…

The Morrison Government has so-called “$12 trustees” in its crosshairs after they amended trust deeds to levy members for potential penalties. But APRA believes funds might collapse without them. The Morrison Government’s amendment to Section 56 of the SIS Act was intended to prevent super funds from paying penalties using member money, but – as…

The problems with Your Future Your Super (YFYS) run deep – among them, how super funds will manage ESG within the confines of low tracking error strategies. But it’s not the end of the road. Under the YFYS reforms, implementation manager Parametric believes tracking error will face downwards pressure as funds try to stay on…

This is the last edition of Investor Strategy News for the year. We will next publish on January 10, 2022. Here are some thoughts on the year past, based on reader reactions to our stories. Our most popular for the year was our coverage of the Australian Catholic Superannuation and Retirement Fund’s APRA performance test…

APRA’s decision not to include private credit in the Your Future Your Super fixed interest benchmark creates an opportunity for super funds to outperform without compromising tracking error, according to a new report by Atchison Consultants. APRA’s chosen benchmark for fixed interest – the Bloomberg AusBond Composite 0+ index – only captures the government and…

If super fund investment staff didn’t appreciate the importance of indices prior to the introduction of YFYS, they should do now. With fixed income, the indices tell an interesting, and in some ways counterintuitive, story. Notwithstanding the continued popularity of absolute returns-based portfolios, especially with the end investors, the new fund performance test implemented by…