Telstra Super chalks up league-leading 15.8% gain for latest FY

Telstra Super delivered an industry-leading 15.8% return among Australian superannuation funds for the fiscal year ended June 30, 2014, according to Sydney-based superannuation research firm SuperRatings Pty Ltd.

The A$16 billion (US$15 billion), Melbourne-based corporate fund's “balanced option” - defined by SuperRatings as fund's with portfolio exposure to growth assets of between 60% and 76% - bested the 14.0% return for the next closest fund, A$1.5 billion Intrust Super, Brisbane, by 180 basis points.

In third place, with a 13.9% gain, was A$40 billion UniSuper, Melbourne.

The median return for the 50 big superannuation funds covered by SuperRatings' annual survey came to 12.7% for the latest fiscal year, a second year in a row of solid double-digit gains, even if two percentage points lower than the prior year's 14.7% advance.

In a telephone interview, Kirby Rappell, SuperRatings' Sydney-based research manager, said heavy exposure to growth assets and alternatives powered Telstra Super's gains for the latest fiscal year.

Telstra's website showed allocations for its balanced fund of 28% to Australian shares; 27% to international shares; 10% to property; 5% apiece to infrastructure and private equity; 3% to hedge funds and 2% to credit. Among defensive assets, the fund had allocations of 9% to Australian bonds; 5% to international bonds; 4% to cash and 2% to income securities.

The latest year's stellar returns lifted Telstra Super to the top of the performance charts for the five years through June, 2014 as well, with an annualized gain of 10.7%. REST Super came in second with an annualized 10.6% return for the period, followed by GESB Super with an annualized 10.2% gain.

Jim Christensen, Telstra's chief investment officer, couldn't be reached for comment.