Industry funds outperform
AUSTRALIA - Industry superannuation funds outperformed master trusts in February, according to analysts Chant West.
Over the month, Australian stock markets lost 4.6%, while international shares lost 9.1% on a hedged basis and 10.8% unhedged.
As a result of this, super funds with a significant exposure to shares reported negative returns, although industry funds delivered a less negative performance than commercial funds.
Industry funds made a three month return of -5.1% compared to -6.5% for master trusts over the same period. On a five year annualised basis, industry funds were by far the stronger performer, with returns of 4.7% compared to 1.9%.
Chant West said this better performance was in part to higher allocations to unlisted assets among industry funds, which averaged 28% at the end of 2008, against 10% for master trusts.
As well as having higher allocations to unlisted assets, industry funds also invested in more asset classes.
Chant West said the average strategic allocation to unlisted assets for industry funds was 9% in property, 4% in private equity, 7% in infrastructure and 8 in hedge funds and other assets, while average master trust allocations were 2% property, 1% private equity and 7% hedge funds.
Yesterday, Australian minister for superannuation and corporate law, senator Nick Sherry, warned the industry the shady and hitherto 'secret' practice of shifting super members out of industry funds and into retail products when made unemployed, then doubling the fees to commercial super levels, was "unconscionable and outrageous" (Globalpensions.com ; 18 March 2009)
As a result of this, super funds with a significant exposure to shares reported negative returns, although industry funds delivered a less negative performance than commercial funds.
Industry funds made a three month return of -5.1% compared to -6.5% for master trusts over the same period. On a five year annualised basis, industry funds were by far the stronger performer, with returns of 4.7% compared to 1.9%.
Chant West said this better performance was in part to higher allocations to unlisted assets among industry funds, which averaged 28% at the end of 2008, against 10% for master trusts.
As well as having higher allocations to unlisted assets, industry funds also invested in more asset classes.
Chant West said the average strategic allocation to unlisted assets for industry funds was 9% in property, 4% in private equity, 7% in infrastructure and 8 in hedge funds and other assets, while average master trust allocations were 2% property, 1% private equity and 7% hedge funds.
Yesterday, Australian minister for superannuation and corporate law, senator Nick Sherry, warned the industry the shady and hitherto 'secret' practice of shifting super members out of industry funds and into retail products when made unemployed, then doubling the fees to commercial super levels, was "unconscionable and outrageous" (Globalpensions.com ; 18 March 2009)
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