POWERED BY MOMENTUM MEDIA
Super industry will consolidate over the next five years
Over the next five years, the superannuation industry will consolidate into a smaller number of larger funds as a result of member ‘stapling’, the Your Future, Your Super performance test and new regulatory obligations.
Speaking at a FINSIA webinar, Cbus chief investment officer, Kristian Fok, said super funds would need to adjust their business models to focus on performance in order to adapt to increased competition in the market.
“The performance test will [mean] you need to stay above a certain level to stay in the game but actually to continue to succeed you’re going to [need to] attract members in what I think is a more Choice type of environment,” said Fok.
“Although we’re all meant to be pitching for the best risk-adjusted returns, from a business point of view you’re probably going to see slightly different paths that the funds will take over the next five years.”
Some of the directions super funds could take, according to Fok, was lower business costs to manage the performance test, providing funds for specific cohorts of members or providing a fund with an isolated focus on performance.
Georgie Dudley, JANA head of business strategy and innovation, added that default funds may not seek to differentiate their product to the extent that Choice products would.
“The fear of failure and the implications of that failure of the performance test is very significant,” said Dudley.
“The upside is more limited and that might move to a greater differentiation within the choice landscape.”
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(%)
