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Top 10 balanced funds in tough year

Hostplus has topped the keenly anticipated performance charts for balanced super funds for the year to June, as well as the past 10 years, SuperRatings has confirmed. Only three funds showed positive returns for the 12 months.

The figures, published Friday (July 15), also confirmed that two funds which failed last year’s YFYS performance test, Australian Catholic Super and Christian Super, both of which are now in the process of merging with larger funds, made it into the SuperRatings top 10 for the year. Both also outperformed their chosen merger partners in that period.

The top 10 out of the 50 fund options in the survey for the 12 months, with ‘balanced’ defined as being between 60-76 per cent in growth assets, were:

  • Hostplus Balanced, 1.6 per cent (9.7 per cent over 10 years)
  • Qantas Super Gateway Growth, 0.6 per cent (8.1 per cent)
  • Christian Super – MyEthicalSuper, 0.5 per cent (7.9 per cent)
  • legalsuper MySuper Balanced, -1.0 per cent (8.3 per cent)
  • Australian Retirement trust Super Savings Balanced, -1.0 per cent (9.0 per cent)
  • Energy Super Balanced, -1.2 per cent (8.1 per cent)
  • Australian Catholic Super (ACS), -1.2 per cent (7.8 per cent)
  • CareSuper Balanced, -1.7 per cent (8.7 per cent)
  • HESTA Balanced Growth, -1.8 per cent, 8.5 per cent
  • Telstra Super Corp Plus Balanced, -1.9 per cent (8.5 per cent).

SuperRatings also published some seven-year numbers which illustrate the performances of some of the top funds when judged against the volatility of the markets – and their benchmarks – over that period.

  • Kirby Rappell, SuperRatings executive director, said that while the past year saw super funds report a modest fall in returns, the benefits of diversification in their portfolios had shone through. The risk-adjust returns for seven years showed how much members were being rewarded for taking on the market ups and downs. The top 10 on a volatility-adjusted basis for the seven years were:

    • Australian Retirement Trust (Qsuper accum) Balanced, 6.1 per cent
    • Catholic Super Balanced Growth (not the ACS fund), 7.1 per cent
    • Mercy Super MySuper Balanced, 6.8 per cent
    • Australian Retirement Trust Super Savings Balanced, 7.3 per cent
    • AustralianSuper Balanced, 7.6 per cent
    • CareSuper Balanced, 6.5 per cent
    • Qantas Super Gateway Growth, 6.8 per cent
    • Spirit Super Balanced (MySuper), 6.5 per cent
    • Aware Super Growth, 6.6 per cent
    • NGS Diversified (MySuper), 6.3 per cent.

    Ian Patrick, the CIO of Australian Retirement Trust (photo at top), said both of the fund’s portfolios in the top 10 on a risk-adjusted basis incorporated dynamic asset allocation processes that saw weights increased as expected forward returns increased.

    “While the recent sell off in many markets clearly makes them cheaper, this is tempered by economic views, particularly given the uncertain outlook for inflation,” Patrick said.

    SuperRatings’ Rappell said that while members might be disappointed by negative returns for the past year, over the long term the 7 per cent a year average return since 1992 (when the Superannuation Guarantee was introduced) should be celebrated.

    He said that the fact that two of the top 10 funds for the year did not pass the MySuper performance test (under the Government’s YFYS) showed the challenge of how to assess both risk and return.

    “Also, a note for Qantas Super, which was a top performer last year and sustained strong performance this year: It’s pleasing to see the benefits of these outcomes for Qantas Super members who have been among the hardest hit during the Covid period,” Rappell said.

    On the other hand, he said, there were challenges for other members who might have switched to fixed interest in recent times as they saw anaemic returns in cash but wanted something more defensive. They would average a minus 8.1 per cent return for the year. The only SuperRatings index performing worse than fixed interest was for international shares – down -8.9 per cent.

    “This shows the fact that we need to keep driving engagement with super and the need for a long-term focus, as this will be a tough result for those members in fixed interest options,” he said.

    David Elia, the chief executive of Hostplus, said the fund’s performance was “… a testament to Hostplus’s active investment approach, especially in navigating volatile markets.”

    Andrew Spence, Qantas Super CIO, said: “Our focus on diversification, risk management and investment governance help to deliver competitive returns despite the uncertainty in markets, as evidenced by our returns for the past two financial years.”

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