Cbus claims multi-million dollar saving by internalising investment management
A major industry superannuation fund has claimed to have saved its members $135 million a year in reduced investment fees, including as a result of bringing many investment functions in-house.
Building and construction industry fund, Cbus made the claim to a Parliamentary Committee in justifying its decision to reduce the use of external advisers.
The fund told the House of Representatives Standing Committee on Economics that its total investment cost fell from 0.86% in the 2017 financial year to 0.56% last financial year for its Growth (Cbus MySuper) investment option, noting that it was the default option for accumulation members in the fund, representing 82% of total funds under management.
“Based on this reduction in costs from 0.86% to 0.56%, members invested in the Growth (Cbus MySuper) option last year alone saved $135 million of investment fees, and cumulatively have saved $240m since FY17,” Cbus said.
“Broadly assuming the same level of fee savings across the other options, total savings to Cbus members in FY20 (as compared to FY17) are expected to exceed $150 million,” it said.
Further the fund claimed that the decline in fees had not be brought at the cost of performance, pointing to recent research and ratings house analyses which had placed Cbus in the top tier of super returns as at 30 June, last year.
Cbus has internal managed strategies for cash, fixed interest, credit, equities, and infrastructure.
The fund noted that its wholly-owned subsidiary, Cbus Property Pty Ltd managed a part of the fund’s total property portfolio and had “delivered very strong returns over the short and long-term”.
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