CFS credits fixed income and equities for double-digit returns

Colonial First State (CFS) has flagged private markets and fixed income as growing areas of interest after it delivered 10.7 per cent for Essential Super members over the financial year.

The fund’s balanced FirstChoice Employer Super (Lifestage 1965–69) fund has delivered 10.5 per cent return while its growth option FirstChoice Employer Super (Lifestage 1975–79) delivered 12.2 per cent.

CFS has just under 200,000 total members in FirstChoice Employer Super representing $14.9 billion in funds under administration. In total, CFS funds under management are $147.4 billion.

Chief executive, Kelly Power, said the strong performance was testament to the “depth and capability” of CFS’ new investment team. 

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“We are delighted with the investment performance we have been able to achieve for our members over what has been a volatile period in investment markets,” Power said.

Over the last two years, CFS has made significant changes towards its investment capabilities, with the appointment of a new chief investment officer last July and the appointment of the world’s largest asset manager BlackRock to managing investments in two of its MySuper investment products.

CIO Jonathan Armitage, who joined in July last year from NAB Asset Management, highlighted the role of strong returns from global and domestic equities in CFS’ FY22 performance.

“We have also seen good returns from fixed income in what has been a very challenging market, which has helped us achieve such a strong result,” Armitage said.

Looking ahead, he flagged the growing potential of unlisted assets.

“CFS is in a strong position to capitalise on those opportunities and continue delivering strong returns for members through our disciplined investment approach,” he added.

Recently, JP Morgan’s 2023 Future of Superannuation report, which collated data from six superannuation fund leaders in Australia and the UK, said unlisted assets have been a “significant driver” of super funds’ long-term outperformance.

“While funds also see opportunities in listed vehicles – and remain mindful of illiquidity and valuation issues – their appetite for private market assets continues to grow,” it stated.