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.

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“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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Well done Industry Super, you have bashed the banks and other Real Advisers for 20 years.
Now Industry Super are the most Conflicted Vertically Integrated Super / Funds / Advice structures in the country.
All the better for Selling only your own products via your own call centre sales jockeys.
Zero BID, Zero FARSEA, Zero chance of getting in trouble with ASIC.
And rivers of gold flowing to Corrupt Union officials.
Disgustingly Conflicted !!!!

Ah yes, vertical aligned & vertical integration - sell only one product that has your own funds predominant in the menu. Wasn't that exactly what all the retail insto's and banks got abso-f*cking-lutely hammered and smashed by ASICkjoke and the doddery Haines Royal comedy show not that long ago? What is different in this scenario than the AMP's and National Mutuals of old, where they flogged only their products with their funds and fee gouged every step just like these union industry funds?

Amazing how CBus and union funds etc are the flogtard regulator's favourite little boys who can never do any wrong.

What could go wrong here.....

Wonder how the new work from home culture is impacting all the rents on commercial buildings, toll roads, airports etc. that these funds own.

Yes - will effect superannuation contributors to both retail and industry funds.

'affect'

Industry? Wow. I thought Industry Super investments were placed with greater skill, diligence (see Karen Chester's comments) and all manor of better intentions than that available or achievable by any retail investment team or for that matter normal human being - highest returns and lowest fees for most periods and all that.
Are you saying that the Industry Super Infrastructure Investments are at risk of long-term declines in value?

The problem with big funds such as these insourcing investment management has a couple of big issues for me:
- you are likely employing analysts, fund managers etc that have been rejected in the wider industry because they are second rate.
- I question how likely you are to fire your investment team for bad results when they are in-house versus external investment teams.

I'm sure there are nice risk management strategies in-house to "manage" this, but I have my doubts this "risk management" as the clubhouse gets nice and cosy.

There's no way in hell I would invest my money in a union run fund.
All profits to members AFTER
* Useless union mates have been employed
* Buikdung contracts 'negotiated' on union run building sites

Remember Bill Shorten and his wage negotiations for members?

Lol

Just goes to show... there's always some way to put a positive spin on why we invest in unlisted "employer company" projects!!

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