20 funds facing immediate heat map pressure

5 December 2019

There are as many as 20 superannuation funds which are likely to face significant pressure from the Australian Prudential Regulation Authority (APRA) when it publishes its heat map data this week and at least a further 20 who will be on notice that they are facing regulatory scrutiny.

That is the bottom line of evidence given by APRA deputy chair, Helen Rowell to a Parliamentary Committee in which she stated that 20 funds were already on the regulator’s heat map radar.

Discussing the number of funds which would be under scrutiny, Rowell pointed to the 20 definite under-performers.

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“When we've looked at the outcomes of what will be published, we've looked at two main groups of what we might call underperformers—those that are looking really quite poor across a number of dimensions, and there are probably about 20 in that group,” she said. “Then there's another group that sits a little bit above that, but still has some issues, which is around a similar size.”

“The ones that are pale yellow to white are the other half of the MySuper population,” Rowell said.

The APRA deputy chair said that the group of funds identified as under-performers was larger than APRA would have liked but noted that the regulator was not surprised by the funds which had been included in the list.

“We’ve been engaging with these entities to try and get them to improve over some time,” she said.

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Disclaimer: Past performance is no indication of future performance.

I can foresee particular funds may shift into riskier asset classes in order to bolster their net performance and not be considered 'underperforming' in their group. Well done APRA (insert sarcasm here).

I have an investment which outperforms all others... ALL THE TIME!

It isn't Superannuation.

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