YFYS

Basing an investment strategy on the goldilocks investment markets of the last 35 years gives rise to considerable risk, writes Michael Block, and now might be the time to get out of growth assets.

Your Future Your Super makes ESG investing a fraught proposition for super funds. But decarbonising benchmarks doesn’t have to generate (that much) tracking error – if you do it right.

APRA’s “utopian ambition” for organic super fund consolidation might not be realised, leaving a long tail of small funds. More drastic measures could be needed.

With prospective portfolio returns likely to be lower than they have been in the past, the incentive to reduce risk and enhance returns is greater than it has ever been. The investment maths is compelling, but regulatory risk might overpower it writes Michael Block.

Your Future Your Super is poorly implemented, draconian, stifles innovation and has proven to be a gigantic – and expensive – waste of time. Other than that it’s a really good idea, writes Michael Block.

While APRA “doesn’t feel the need to start each year with a shiny new set of initiatives”, it’s still planning on scrutinising super funds’ valuation practices and giving more “sub-scale” funds the nudge to merge in 2023.

“We had the courage to stick with our investment strategies,” ACS CIO Michael Block tells ISN. “Often what happens with a strategy that doesn’t work is you cut and run at the wrong time. We were lucky enough or clever enough or brave enough that that didn’t happen, and our members reaped the benefit this year.”

The superannuation industry is grappling with the complexity of delivering retirement solutions. Perhaps the only way to assess how well they work in the future is to start assessing them right now.

Vanguard is living up to its name, with the launch of its superannuation product likely heralding a new age of high intensity fee competition. Managing director Daniel Shrimski says the index giant is willing to play “the long game” to become a major player in the market.

New research confirms the “anecdotal concerns” of the superannuation industry that the current design of the Your Future Your Super test makes responsible investing a no-go zone.