A new report “from the coalface” of super fund investing has gone some way to quantifying the cost of shonky investment management, with members potentially losing out on hundreds of thousands of dollars.
Surging equity markets have driven the Future Fund’s return higher, but its prediction that inflation will be stickier than expected has been born out and it “remains conscious of the potential for significant deterioration”.
A number of super funds managing less than $10 billion have been slugged with an increase in their restricted APRA levy of more than 80 per cent even as the regulator pushes them to keep costs down.
Australia’s biggest super funds disagree on what the new Your Future, Your Super performance test should look like, but they both think the consequences for failure should be just as weighty – and apply to everybody equally.
The $280 billion ART has become the latest megafund to set up an offshore outpost as it looks to secure “even more compelling investment opportunities” for its 2.3 million members.
Owning the largest stocks has historically been a recipe for underperformance over every period, according to value house Pzena, but the madness of benchmark construction means some investors have few choices but to.
First Sentier’s decision to close a number of strategies and pivot towards private markets handily illustrates the pressures facing the Australian funds management scene – and the new period of competition into which it is now entering.
Few would disagree that a strong regulator is required for a strong superannuation system. But APRA’s myopic focus on cost to members means its $70,000 Christmas party is unlikely to help its reputation.
Private credit has seen huge inflows in recent years, but contrary to the claims made by some of its advocates it’s not a defensive asset class or a substitute for investment grade corporate and sovereign bonds.
Everybody and their dog has an idea for putting the Future Fund to work beyond its core mandate.
But the best idea for getting it to invest more in Australia’s economy is probably already being done.
Varun Laijawalla from Ninety One shares insights with James Dunn from The Inside Network on how investors perceive emerging markets.
Varun Laijawalla from Ninety One shares insights with James Dunn from The Inside Network on how important China is to emerging markets.
Varun Laijawalla from Ninety One shares insights with James Dunn from The Inside Network on what investors are suited to emerging markets.
Varun Laijawalla from Ninety One shares insights with James Dunn from The Inside Network on what drives emerging markets.
Hostplus’ young demographics and the mandatory nature of superannuation means it gets “a free kick before every game”. But CIO Sam Sicilia says funds must keep questioning the assumptions that underpin the superannuation system and their relationship to it.
Australia’s largest homegrown asset consultant is plotting an expansion further beyond its traditional superannuation clients, while consolidation in the industry is changing the way they work.
Good investing requires real sacrifices, according to Oaktree’s Howard Marks, but you can’t expect to be compensated just for making them.
Australian super funds roundly beat their global peers on investment costs due to a combination of hardball negotiations around fees and savvy implementation in pricier asset classes.