POWERED BY MOMENTUM MEDIA
Member sentiment boost for APRA funds
Australian Prudential Regulation Authority superannuation funds have seen better cash flows than expected in 2014, especially among industry funds, according to Tria Investment Partners.
The increase in cash flows come as member contributions jumped significantly in 2014, rising by about 50 per cent in the industry funds segment, while other segments saw smaller but substantial jumps.
Net inflows rose by about 20 per cent for industry funds, which is an extra $3 billion. Tria said that while this was noteworthy in itself, the fact that around half of it came from member contributions was striking.
Based on anecdotal evidence, Tria found the improved sentiment came as members were comforted by the Coalition's policy not to tinker with the super system too much.
Also, as more people inch closer to retirement, they are realising that their savings are insufficient and are trying to boost their accounts. Good returns since the global financial crisis and cyclical improvement in 2013 also helped.
"Member contributions are generally discretionary, so they are a proxy for whether members are confident about their super and whether they see it as attractive. If members feel negative about super, as a group they will reduce their voluntary contributions and just rely on their compulsory employer contributions, Tria said.
Tria also noted that member contributions usually rise on the back of incentives like one-off tax changes, which makes it more appealing to transfer huge amounts of money into super. But there were no special factors in 2014.
The boost in sentiment meant an extra $4-5 billion went into super compared to 2013.
Recommended for you
The two funds have announced the signing of a non-binding MOU to explore a potential merger.
The board must shift its focus from managing inflation to stimulating the economy with the trimmed mean inflation figure edging closer to the 2.5 per cent target, economists have said.
ASIC chair Joe Longo says superannuation trustees must do more to protect members from misconduct and high-risk schemes.
Super fund mergers are rising, but poor planning during successor fund transfers has left members and employers exposed to serious risks.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
88.01 3 y p.a(%)
2
Global X 21Shares Bitcoin ETF
72.60 3 y p.a(%)
3
Global X GlobalX FANG+ ETF
44.46 3 y p.a(%)
4
Pengana High Conviction Equities B
39.12 3 y p.a(%)
5
Pengana High Conviction Equities A
39.05 3 y p.a(%)
