The Australian Prudential Regulation Authority’s (APRA) recently released superannuation fund comparison cannot serve as a “meaningful tool” when comparing performance of superannuation fund investments, a research house has said.
As Super Ratings reported the fifth straight month of positive returns for superannuants, it was critical of APRA’s tables for ignoring the “huge variances in investment strategies and objectives held by funds”, arguing that it distorts performance where a significant number of investment options are available in a fund.
While saying APRA’s tables were “a quality release of detailed information”, Super Ratings noted that only a small number of the funds in APRA’s tables have an individual investment strategy, despite “the overwhelming majority of funds” that have numerous investment strategies.
“The aggregating of the performance of these strategies to determine a rate of return has led to completely meaningless performance data,” Super Ratings said.
Other groups, including professional bodies the Financial Planning Association and the Association of Superannuation Funds of Australia, have acknowledged the quality of APRA’s material but said its usefulness is limited.
On super fund performance, Super Ratings said aside from those invested in cash options, members would be seeing “hefty” negative returns in their June 30, 2009, statements.
However, with recent performance notably improving, account balances of superannuants will begin to recover earlier losses.
