Consistent mid-size super funds come out on top

Consistency has seen mid-sized funds come out on top in the first round of the newly launched Superannuation Fund Crown Ratings, a quantitative rating system launched by data company, FE, and Money Management’s sister publication, Super Review.

The list of funds to proportionately have the most top-rated options, shown in the table below, is dominated with mid-size funds. With the exceptions of AustralianSuper and REST Super at the larger end and BUSSQ Building Super and AustSafe Super at the smaller, it’s largely the superannuation providers whose number of offerings and funds under management (FUM) hover in the middle of the road that have done well.

 

Related News:

 

Top 15 superannuation funds for highest % of options to receive 5 Crowns

   Group

   % of    options    for 5-   Crowns

   NGS Super

75      

   AustSafe Super

67      

   QSuper

60      

   Statewide Super

60      

   Sunsuper

59      

   First State Super

58      

   Australian Super

50      

   BUSSQ Building Super

50      

   Energy Super

50      

   VicSuper

50      

   CARE Super

45      

   Legal Super

42      

   REST Industry Super

42      

   EISS Super

40      

   Telstra Super

40      

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Considering the emphasis of the Australian Prudential Regulation Authority (APRA) and of some larger providers on scale, this is worth noting.

While some of the larger providers had high numbers of four and five Crown options, this was offset by equal amounts of one and two Crown ones. This doesn’t really show strength then, as they struggled as much as they succeeded. Another interesting perspective on scale, then.

There was also little to separate many of the options offered by these top 15 funds.

The chart below, for example, shows the returns of the top ten of these funds’ MySuper options over the last three years (as that’s the performance period upon which the Crowns were determined). The difference in returns between the best-performing, AustralianSuper’s Balanced Option, and the lowest, BUSSQ Building Super’s Balanced Growth Option, was less than five percentage points.

Considering that most of these products have longer investment horizons, this is a negligible difference. Again, consistency is a recurring theme.

Beyond the Crowns themselves, FE has also created peer group missed asset indices. Reflecting that the superannuation industry isn’t managed the same way as traditional investment funds are, the indices seek to provide a benchmark for superannuation fund performance.

Speaking on the benefit of the indices in light of the Crowns’ overarching goal of better informing the public and industry on superannuation fund performance, FE’s head of data for Australia, Stuart Alsop, said: “Being able to asses a fund/product option based on a benchmark of their peers aids with comparability and assists the member in making a more informed decision.”

All of the MySuper options looked at in chart above, for example, also fit into one of these indices. This means that for members going into a fund’s default option, they can better assess the performance of that option against its peers.

The ratings are based on alpha, volatility, and consistency and strength of performance, measured across the three years prior to each rebalancing, which will occur biannually.




Related Content

Super funds bounce back in February

Superannuation funds have come out of the December quarter market downturn in good shape, with February’s median balanced option’s return of 2.6 p...Read more

ASIC striking “significant blow” to Choice members

The Australian Securities and Investments Commission’s (ASIC’s) deferral of consumer disclosure requirements for Choice superannuation products co...Read more

Pension Loan Scheme: A viable alternative for older clients?

Is expanded Pension Loan Scheme (the Scheme) a viable alternative for retirees who are asset rich but cash poor? Extra cash flow can be useful whether...Read more

Author

Comments

Comments

These ratings seem inconsistent with those over same 3 year period from other established ratings such as superratings and chant west. What’s the underlying methodology and weighing?

a totally meaningless set of figures - it assumes the risk for each is the same - which we know its not. You would be better served and more credible (in lieu of being a mouthpiece for the ISN world) if you included the published measures of standard deviation and sharpe ratio alongside these figures. It would entirely change the complextion of what you are trying to show.

Add new comment