POWERED BY MOMENTUM MEDIA
PC chastened over fund performance methodology
The Productivity Commission (PC) has again been taken to task over its approach to superannuation investment performance – this time by the Association of Superannuation Funds of Australia (ASFA).
In a submission responding to the PC’s Supplementary Paper on Investment Performance, the ASFA has expressed concern about the commission’s approach, particularly around the benchmarking of individual fund/product performance.
Barely a week after actuarial research house, Rice Warner questioned the PC’s approach, the ASFA submission said it considered that “numerous caveats/limitations stem from the Commission’s data and benchmarking methodology”.
“Together, these caveats/limitations suggest there is a significant margin of error around any threshold for ‘underperforming’ funds or products,” it said. “Nonetheless, the Commission defines underperformance as a very small deviation from what is an approximate threshold.”
“In addition, in terms of forward-looking performance assessment, the Commission’s current analysis shows that measures of short-term investment returns are not a reliable predictor of long-term performance,” the submission said.
“ASFA considers there would be risks around applying the Commission’s current approach to any selection process for funds or products,” it said. “ASFA is concerned about underperformance and the impact on consumers.”
However, the submission said that given these issues, ASFA considered it would be difficult to draw definite conclusions as to whether particular funds/products were “underperformers”.
“In this regard, there is a risk that funds/products would be designated as ‘underperforming’ despite having the potential to deliver high returns over the long term,” the ASFA submission said.
Recommended for you
The lower outlook for inflation has set the stage for another two rate cuts over the first half of 2026, according to Westpac.
With private asset valuations emerging as a key concern for both regulators and the broader market, Apollo Global Management has called on the corporate regulator to issue clear principles on valuation practices, including guidance on the disclosures it expects from market participants.
Institutional asset owners are largely rethinking their exposure to the US, with private markets increasingly being viewed as a strategic investment allocation, new research has shown.
Australia’s corporate regulator has been told it must quickly modernise its oversight of private markets, after being caught off guard by the complexity, size, and opacity of the asset class now dominating institutional portfolios.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
92.15 3 y p.a(%)
2
Global X 21Shares Bitcoin ETF
53.24 3 y p.a(%)
3
Global X GlobalX FANG+ ETF
43.15 3 y p.a(%)
4
DomaCom Shoreline North Coogee
36.26 3 y p.a(%)
5
GAM LSA Private Shares AU I
35.87 3 y p.a(%)
