Rankings Will Give Super Fund Investors Better Understanding Of Performance

Post by NeilMc on August 24, 2009 · Under Capital Markets, Wealth Management, investments · Comment 

Experts believe that performance rankings of superannuation (super) funds given by the regulator will provide consumers a better understanding of the behaviour of their retirement incomes.

According to data published by the Australian Prudential Regulatory Authority (APRA), the 200 largest super and non-profit funds outperformed their retail peers in the five years ending June 30th 2008.

Fiona Reynolds, chief executive of the Australian Institute of Superannuation Trustees (AIST) said that the APRA report provided independent data which would help investors rate their super fund investments against other products in the market.

“I think you can see that if your fund has consistently underperformed other funds, then that is a good starting point for you to start asking further questions. Given that superannuation is compulsory, the more information people have about the performance of their funds, the better.” Ms Reynolds said.

AIST represents superannuation funds in the non-profit sector and whose members have $400 billion worth of funds under management.

CHOICE a consumer advocacy group, through a spokesperson, said the data that APRA has made available was a great first step in aiding investors in their analysis of superannuation funds.

“With this information, individuals can compare their own investment returns against their fund’s average return and start to get a sense of how their particular investment is performing. It also starts to create some broad expectations of returns in the superannuation industry and that really hasn’t been available in any kind of independent way until now.” Elissa Freeman, CHOICE’s senior policy officer said

There are four broad categories of superannuation funds, corporate, industry, public sector and retail funds.

Of the four categories, the first three are non profit and some have restrictions over eligibility of investors. The fourth, retail funds, operate on a commercial basis, and seek to make profit resulting in higher fees and charges.

APRA is consulting with market participants on providing more information on the performance of Australia’s superannuation funds, including the possibility of the returns of the various investment options being available in future publications.

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