AUSTRALIA - UniSuper, Australia's fourth-largest superannuation fund, has joined calls recommending the Australian Prudential Regulation Authority (APRA) reform comparison reporting.
He commented: "When members compare funds, they don't particularly care whether it's an industry fund or a retail fund, or even how that fund has performed as a whole. What's important is how their investment has performed relative to other real options in the market."
UniSuper said APRA should collect, collate and publish performance information based on investment options with comparable investment strategies over 1, 5 and 10 year periods.
McCredden added: "This way members can compare funds based on real returns over the short, medium and long term, rather than a purely hypothetical whole-of-fund measure."
UniSuper also said APRA needed to establish commonly understood industry classifications.
"Inconsistencies in growth / defensive asset definitions can not only give some funds an unfair advantage (or disadvantage) when reporting performance, it can also mislead members about the level of risk held by the option," said McCredden.
"APRA, therefore, needs to mandate what constitutes 'growth' and 'defensive' assets."
"While we recognise that APRA may not currently have access to such detailed asset allocation and investment return information, we strongly recommend that they broaden their data collection to include information that is both relevant and meaningful to members," he concluded.
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