YFYS

The Your Future, Your Super performance test is now redundant. The superannuation industry, and its regulators and policymakers, must figure out what comes next.

The UK government is set to follow the Australian example by pressuring default pension funds to perform or fold under a new draft framework released last week.

In the topsy turvy world of Your Future, Your Super being down 20 per cent is only a bad thing if the benchmark is 50 bips better, and defensive positioning in a weird market isn’t rewarded.

The introduction of the Your Future, Your Super performance test has led to many strange portfolio construction outcomes. They might get stranger yet.

Super funds want to put their $300 billion of annual inflows to work in new renewable energy infrastructure. But policy settings, Your Future Your Super and intensifying competition for local assets could all have unforeseen consequences.

The latest iteration of the Your Future Your Super test has dispatched a large swathe of trustee-directed products even as APRA acknowledges that many are selected for reasons beyond performance.

Valuations are never going to be “perfect”, but that doesn’t mean super funds shouldn’t be working harder to make them more accurate – and more intelligible to the people who really matter.

The world of ethical investing continues to change, and Australian Ethical is investing in itself to keep up. A new CIO and a portfolio of impact investments from the Christian Super successor fund transfer are helping too.

Treasury is fine-tuning the Your Future, Your Super performance test ahead of its next iteration in August. While the updates could pave the way for a better test, its extension to trustee-directed products is cause for consternation.

Australian Retirement Trust has warned that introducing more granularity into the YFYS test might only confuse members and that funds will incur greater transaction costs as new benchmarks are added to it.