The majority of Colonial First State’s (CFS’) MySuper members received a return of almost 13 per cent for the 2016-17 financial year from CFS’ FirstChoice Lifestage.
The figures came as research houses released annual superannuation fund rankings and tended to ignore Lifestage funds, with the firm stating Lifestage funds should be considered in context.
CFS has offered its members the MySuper strategy for over four years, and it has seen positive results every year.
Head of investments, Scott Tully, said: “Most of the members in the FirstChoice Lifestage were invested in portfolios that outperformed nearly every other MySuper provided over the 12 months”.
“However most of the comparisons of MySuper ignore the millions of superannuation members who are invested in life stage funds and only show the performance of the one-size-fits-all MySuper balanced options.”
Tully attributed the performance to growth assets performing strongly over the last 12 months, with market returns in double digits.
The strength of Australian and global equity markets drove higher returns across the investment options. Portfolios designed for members born in the 1970s and 1980s returned 12.9 per cent for the 12 months while the portfolios designed for members born in the 1990s returned 13 per cent.
He said the firm added alternative investment strategies to defensive asset allocation to reduce dependence on interest rates as defensive asset classes such as fixed interest added very little to portfolio returns due to increases in long-term interest rates.
CFS’ FirstChoice’s active managers also performed well throughout the year, with all but one of its 14 multi-manager sector portfolios outperforming the benchmark.
I’d be interested to know what the options for those born in the 60s (late 40s – mid 50s now) and 50s (late 50s – mid 60s now) returned? these groups are much closer to retirement when maxing returns for a moderate/low level of risk is necessary.