Have industry funds lost their edge?
Retail superannuation funds have outperformed industry funds so far this financial year with industry funds looking to have significantly lost their edge ever since the Global Financial Crisis.
The degree to which industry funds have lost their performance edge has been indicated by the fact that research and ratings houses are now using 15-year rather than 10-year time-spans to point to industry fund out-performance.
The latest Chant West data, covering the March quarter, reveals that retail superannuation funds outperformed industry funds with a return of 6.1 per cent versus 5.6 per cent for industry funds.
The data also showed that on the basis of financial year to date returns, retail superannuation funds had outperformed industry funds by 11.7 per cent versus 10.8 per cent.
Chant West went on to note, however, that over a 15-year period industry funds had outperformed retail funds by 7.3 per cent versus 6.1 per cent.
What the data does show, however, is that retail funds have been either ahead or only marginally behind (less than one basis point) the industry funds ever since the Global Financial Crisis.
The main driver for this change in relative standing has been the performance of both Australian and global equities and the higher exposure of retail funds to those asset classes.
The narrowing in return performance comes as the industry funds have sought to argue that they should be preferred in default selection because of past performance.
