Chant West

While equities came out of the blocks like Usain Bolt in January, propelled by strong domestic and international share markets, a White House committed to tariffs and slowing interest rate cuts could still derail investment returns in 2025.

The MySuper reforms have seen costs come down and members getting a better deal, according to a decade of data compiled by Chant West, but the laser focus on fees from government and the regulators mean the industry’s opinion is “generally less sanguine”.

It was non-traditional diversification that saved the top performing super funds in the “torrid” year of 2022, with Chant West’s top 10 funds mostly pursuing larger allocations to infrastructure and private equity.

Chant West’s proposed replacement for the performance test might cut through the complexity and create a fairer system for super funds, which have dramatically altered their investment strategies to avoid failing.

Adding a qualitative measure of performance or the right to appeal to YFYS could enhance consumer outcomes. But critics have warned that it could defang the test.

If reducing the number of funds was its goal, Your Future Your Super has been a wild success. But as an indicator of performance, it leaves a lot to be desired.

One number will never tell the whole story, and a new and improved performance test could comprise as many as nine metrics, according to Chant West. This time around, Treasury is actually listening.

Fewer funds failed the Your Future Your Super (YFYS) test than last year – but plenty of passes have come from managing to the constraints of that test.

Super fund members have been “spared the worst”, while the outperformance of the top ten funds was generated by active management and chunky allocations to private markets.

Super fund data companies are rushing to beat deadlines for June 30 figures, with heightened interest from industry participants and members. The median balanced fund was minus 3.3 per cent, SuperRatings said.