POWERED BY MOMENTUM MEDIA
APRA accused of inappropriate heatmap comparisons
The Australian Prudential Regulation Authority (APRA) has fallen into the trap of not comparing like for like when it produced its superannuation fund heatmaps.
What is more it had not looked at a core outcome – whether funds had achieved their investment return objective.
NSW-based energy industry superannuation fund, EISS Super chief executive, Alexander Hutchison said that while his fund welcomed APRA’s efforts to compare MySuper funds, it was clear that the methodology required further development before the heatmaps could be relied upon.
“Chief among EISS’ concerns is that APRA’s use of data did not present an apples and apples comparison of its MySuper product,” he said.
“Our concerns with respect to the publication of the APRA heatmap, that it is essentially a league table, have been realised. We are being compared to other MySuper funds that have a significantly larger exposure to growth assets, so it is not an apples and apples comparison,” Hutchison said.
He said EISS was surprised that the heatmaps didn’t look at whether funds achieved their investment return objective, essentially their promise to members.
“We exceeded our investment target for our MySuper product over three, five, seven and 10 years but it seems APRA wasn’t concerned whether funds were true-to-label and resorted to comparing investment performance against a complex cluster of generic benchmarks,” Hutchison said.
“We believe a better measure of investment performance is to consider actual risk adjusted returns taking into consideration the volatility of the MySuper option. We’re a lower risk, lower cost fund and have been compared with funds that take greater risk and should therefore be expected to deliver higher returns,” he said.
Recommended for you
The Future Fund’s CIO Ben Samild has announced his resignation, with his deputy to assume the role of interim CIO.
The fund has unveiled reforms to streamline death benefit payments, cut processing times, and reduce complexity.
A ratings firm has placed more prominence on governance in its fund ratings, highlighting that it’s not just about how much money a fund makes today, but whether the people running it are trustworthy, disciplined, and able to deliver for members in the future.
AMP has reached an agreement in principle to settle a landmark class action over fees charged to members of its superannuation funds, with $120 million earmarked for affected members.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
76.97 3 y p.a(%)
2
Global X 21Shares Bitcoin ETF
76.46 3 y p.a(%)
3
UBS Solactive Global Pure Gold Miners UCITS ETF Dis USD
51.13 3 y p.a(%)
4
Global X GlobalX FANG+ ETF
45.15 3 y p.a(%)
5
Select Baker steel Gold Institutional
43.78 3 y p.a(%)
