Skip to main content
MENU
Subscribe
  • Login
  • My Account
  • Logout
  • Register For Free
  • Subscribe
  • Topics
    • Alternatives
    • Artificial Intelligence
    • CIOs
    • Consultants
    • Defined Contribution
    • ESG
    • Face to Face
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Partner Content
    • Private Credit
    • Pension Funds
    • Private Equity
    • Real Estate
    • Regulation
    • Special Reports
    • Washington
    • White Papers
  • International
    • U.K.
    • Canada
    • Europe
    • Asia
    • Australia - New Zealand
    • Middle East
    • Latin America
    • Africa
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • WPS Innovation Awards
    • Influential Women in Institutional Investing 2024
    • Eddy Awards
  • Resource Guides
    • Active Thematic Global Equities
    • Retirement Income
    • Fixed Income
    • Pension Risk Transfer
    • Pooled Employer Plans (PEPs)
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • ESG Sustainability - Gaining Momentum
    • ESG Investing | Industry Brief
    • Innovation in ESG Investing
    • ESG Rated ETFs
    • Divestment Database
  • Defined Contribution
    • Latest DC News
    • The Plan Sponsor's Guide to Retirement Income
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • DC Plan Design: Improving Participant Outcomes
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Research Center
    • The P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
  • Print
Breadcrumb
  1. Home
  2. Retirement Funds
September 02, 2022 10:11 AM

Smaller super funds shine in latest fiscal year, defying regulatory pressures

Douglas Appell
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    superannuation-fund-egg-australian-dollars_i.jpg
    Getty Images

    Top-performing superannuation funds for the latest fiscal year include a number with assets that Australian regulators have suggested are too small to deliver adequate retirement outcomes at reasonable cost for members, according to a report by Melbourne-based investment consultant Frontier Advisors.

    "Frontier's analysis demonstrates that even over the longer term, the correlation between performance and size is not conclusive," with asset allocation a bigger factor in determining outcomes, according to a Frontier news release Friday.

    The Australian Prudential Regulation Authority is effectively saying "bigger is better, and we're saying" small funds can deliver strong performance, too, said David Carruthers, principal consultant and head of Frontier's members solutions group, in an interview.

    While scale benefits are real, there are drawbacks to being big as well, Mr. Carruthers noted. For example, some funds in Australia have become too big to be able to get enough exposure to move the needle in attractive niche market segments — such as Australian small-cap equities or solar farms, he said.

    For a behemoth like Melbourne-based AustralianSuper, the biggest industry fund with more than A$261 billion in retirement assets, investing in a small-cap Australian company would probably only make sense if it moved to take the company private, perhaps partnering with a private equity firm, Mr. Carruthers said.

    Related Article
    Australian super assets drop 0.5% for fiscal year as rate hikes, inflation bite

    The regulators have come out and almost said "if you're less than A$30 billion, merge with somebody else, and we're saying" the evidence just doesn't support that contention, Mr. Carruthers said.

    The latest rankings by SuperRatings, the superannuation fund research and ratings firm, showed the balanced default funds of Qantas Super, Christian Super, legalsuper, Energy Super, Australian Catholic Superannuation and Retirement Fund and TelstraSuper – all with between A$472 million and A$2.6 billion in assets – among the top 10 in terms of returns for the 12 months ended June 30.

    The Frontier news release said the ambiguous connection between performance and size is relevant to continuing debate around the MySuper default fund performance test the government introduced last year, under which funds that don't measure up face enormous pressure to merge with bigger funds.

    Mr. Carruthers suggested the test is a one-dimensional approach to a difficult, nuanced problem — distinguishing good funds from bad funds. One simple test focused on performance in a given year is a blunt instrument, he said.

    For example, Christian Super's My Ethical Super offering — one of 13 MySuper products, out of 76 assessed, that failed the maiden performance test for the fiscal year ended June 30, 2021 — delivered the third-highest returns for the latest year. Having failed the test last year, Christian Super was obliged to inform its members of its failing grade and direct them to consider better performing funds. Anyone who took that opportunity to move missed out on some of the best returns in the market over the latest year, Mr. Carruthers noted.

    Related Articles
    Active managers face headwind in Oz test
    Pandemic withdrawals from super accounts costly for Australians — analysis
    Asset owners face obstacles setting leadership transition
    Recommended for You
    Chatfield_Brett_head-main_i.jpg
    CIO of $64 billion Cbus Super leaves for family office
    Australian 50 dollar note
    Australian super funds seeking U.S. assets worry about Trump
    Australian currency in a wallet
    More Australians opting for self-managed super funds to brave markets alone
    Sponsored
    White Papers
    The State of Lifetime Income Report
    The Next Wave of LDI Evolution
    Retirement security to future income wins, TIAA brings you the latest financial…
    U.S. Public Funds Top Performers: Q2 2024
    Generative AI Investing: Opportunities at a Key Tech Inflection Point
    Research for Institutional Money Management: Advancing Physical Risk Modelling,…
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    October 23, 2023 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Custom Content
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2025. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Artificial Intelligence
      • CIOs
      • Consultants
      • Defined Contribution
      • ESG
      • Face to Face
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Partner Content
      • Private Credit
      • Pension Funds
      • Private Equity
      • Real Estate
      • Regulation
      • Special Reports
      • Washington
      • White Papers
    • International
      • U.K.
      • Canada
      • Europe
      • Asia
      • Australia - New Zealand
      • Middle East
      • Latin America
      • Africa
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • WPS Innovation Awards
      • Influential Women in Institutional Investing 2024
      • Eddy Awards
    • Resource Guides
      • Active Thematic Global Equities
      • Retirement Income
      • Fixed Income
      • Pension Risk Transfer
      • Pooled Employer Plans (PEPs)
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • ESG Sustainability - Gaining Momentum
      • ESG Investing | Industry Brief
      • Innovation in ESG Investing
      • ESG Rated ETFs
      • Divestment Database
    • Defined Contribution
      • Latest DC News
      • The Plan Sponsor's Guide to Retirement Income
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • DC Plan Design: Improving Participant Outcomes
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Research Center
      • The P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
    • Careers
    • Events
      • View All Conferences
      • View All Webinars
    • Print