POWERED BY MOMENTUM MEDIA
Limited number of MySuper licences contain lifecycle strategy
Less than a quarter of the 82 MySuper licenses issued to the end of October include a lifecycle investment strategy and only four of those strategies are designed to operate past retirement.
According to a paper released by Mercer examining lifestyle investing and trends in MySuper only 15 MySuper licenses will offer a lifecycle strategy with the remaining 67 offering static investment positions.
Of those 15 offerings, eight are being offered by retail providers, six by industry providers and one by a corporate superannuation provider with the four strategies operating past retirement being offered by retail providers.
The paper stated "the fact that the MySuper legislation only covers the period up until retirement is a likely contributing factor to the relatively low number of lifecycle funds that provide members with the scope to remain invested throughout their retirement years".
The paper also stated that retail and industry funds have adopted different internal processes to manage the age requirements of MySuper fund members.
The majority of industry funds have adopted 'member switching' from growth to defensive assets while the majority of retail funds will use cohort funds which change the underlying strategy as time progresses.
Mercer also reported that while the legislation for MySuper funds allows for four separate fee levels it was likely those using cohort funds would adopt a single fee.
"While information in this area is relatively sparse for now, we have observed a number of retail funds opting to employ passive management in some or all of their underlying portfolios."
AUTHOR
Jason Spits
Jason has been writing on financial services since 1999 and has worked for on a number of trade media titles in both a full time and freelance capacity. He joined Money Management and Super Review in 2013 in the role of Senior Journalist.
Recommended for you
A major super fund has defended its use of private markets in a submission to ASIC, asserting that appropriate governance and information-sharing practices are present in both public and private markets.
A member body representing some prominent wealth managers is concerned super funds’ dominance is sidelining small companies in capital markets.
Earlier this month, several Australian superannuation funds fell victim to credential stuffing attacks, which saw a small number of members lose more than $500,000.
Small- to medium-sized funds have become collateral damage in an "imperfect" model for super industry levies, a financial institution has said.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
93.34 3 y p.a(%)
2
Global X GlobalX FANG+ ETF
36.96 3 y p.a(%)
3
GAM LSA Private Shares AU I
34.22 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
29.68 3 y p.a(%)
5
VanEck Video Gaming and eSports ETF (AU)
28.89 3 y p.a(%)
