Compare Super Funds Performance Australia - Only three pension funds made any money for members of the popular balanced options in the 2022 financial year, with top player Hostplus seen as relatively successful due to its offloading of bonds and controversial investments in infrastructure and fossil fuel resources.
According to researcher SuperRatings, total losses in the pension industry due to the stock and bond market crisis led to a loss of $3.2 trillion as of June 30, while the average loss for balanced funds was 3.1 percent.
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About 95 per cent of the nation's MySuper funds - the default options that hold the superannuation savings of 14 million Australians - ended the 2021-22 financial year in the red, including the top 10 performers for that year.
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Hostplus topped the ranking with a 1.6 percent return for its balanced fund members. Qantas Super and Christian Super took second and third place with growth of 0.6 and 0.5 percent respectively.
Hostplus also maintained its position over a 10-year period, averaging 9.7 percent annualized returns over that period.
Sam Cecilia, chief investment officer at the $82 billion Hospitality Industry Fund, said his team's decision to reduce bond exposure to zero in 2015 "has paid off big time."
He acknowledged that Hostplus had the advantage of a young member base (average age 37) and few redemptions, allowing it to "play the long game" and adding that its quick profit on interest rates had condemned some rivals.
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"Anyone who bought bonds for protection was thinking about Funding 101 rather than the interest rate environment," Mr Cecilia told The Weekend.
HostPlus continues to double down on unlisted infrastructure assets such as airports, ports and bridges, says Sam Cecilia. These investments have been criticized for their difficulty in selling, non-transparent valuations and political motivations rather than financial returns.
But the portfolio manager said he was unapologetic about putting members in the asset class, which helped avoid industry-wide losses.
"If we only do things for social good and not for revenue, we won't be number one," he said. “We need to go back, go back, go back. Infrastructure assets are often monopolized. You pay every time you dock or take off. These are assets that should be cultured in society.
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Despite criticism from environmental activists, he defended Hostplus' decision to "totally expose" resources to the natural resources sector, including those involved in fossil fuel production.
"Energy stocks have moved north and we've benefited from that, but others who have chosen to stay out of the core fund have not," Mr Cecilia said. The S&P/ASX 200 energy index is up 19 per cent over the past 12 months.
He backed tech billionaire Mike Cannon-Brookes as a major shareholder in AGL Energy and ignored calls from environmental investors to divest. “We have socially responsible investment options. If you want to invest [in this option], you can, but we can't say what will be put into the overall fund," he said. "Communicating with companies is the only way to affect change."
Qantas Super manages $8.5 billion on behalf of the airline's current and former employees, linked to investments in the energy sector, particularly in the US.
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Andrew Spence, the fund's chief investment officer, said: "Our members can be confident that Qantas Super is creating portfolios that match our competitive advantage in terms of capacity-constrained, alpha-based opportunities."
In contrast, large sector super funds such as Cbus and Aware Super have “reduced” their exposure to fossil fuels, according to activist market forces – at least their growth or high growth funds.
Balanced assets of Cbus and Aware decreased by 3.8 and 3.7 percent respectively during the financial year. However, they rank fourth and tenth on the list of best performers for 10-year outlooks, with average returns of 9 and 8.5 percent.
The country's fourth and fifth-ranked LegalSuper and Australian Superannuation Trust both lost around 1 per cent, while Hesta and Telstra Super finished in the top 10 for the year despite negative returns of 1.8 per cent.
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Kirby Rappel, chief executive of SuperRatings, said the results showed some super funds were unprepared for the rapid return of a bear market amid a decade-long bull run in global equity markets.
"Over the last 10 years, we've put a lot of emphasis on growth," Mr. Rappel said. "As market volatility increases, I think the need to emphasize risk and downside protection will re-emerge."
But he said pensioners should be "comfortable" with the rating because of a broader market slump, with the Dow Jones Industrial Average down 16 per cent and the S&P/ASX 200 down 13 per cent.
"For most people, if you look over the last year, the movement up and down is quite quiet. Of course, this is due to the fact that the average return of the previous year was 18 percent, and some funds had more than 20 percent. cents," said the analyst.
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"People haven't seen a big increase in their balance sheet or a big loss, so I think it's not a bad result when we look at the past year."
Despite leading the list, the Hostplus Index Balanced Fund, recommended by best-selling Barefoot Investor author Scott Pope, which uses a passive investing style that tracks the broader market, fell 5.7 percent.
Alex Wikovich is the editor of Wealth magazine. He writes on financial advice, fund management, pensions and banking, with a particular focus on the next generation of investors. Email Alex at [email protected]
Lucy Dean writes about wealth management and personal finance for the Australian Financial Review's Sydney newsroom. Connect with Lucy on Twitter. Email Lucy at [email protected]NZ's superannuation business, now owned by Insignia Financial, which is the annual top-billed "fat cat" fund for underperforming investments.
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Insignia's OnePath stable super funds have retained the coveted title of Australia's largest "fat cat fund" by online investment advisor StockSpot.
As in previous years, for-profit retail funds dominate StockSpot's "Fat Cat Funds" list.
OnePath manages five worst-case aggressive growth products that invest at least 80% of their assets in high-yielding investments; The two products with the worst growth are 60 to 80 percent of high-income assets; two unbalanced products that convert 40 to 60 percent of members' retirement savings into risky assets.
Colonial First State was the next worst super fund with five 'fat cat' products, while AMP and ClearView managed four 'fat cat' products.
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The Qantas Employee and Family Fund has been named Australia's Best Super Fund, managing eight Fit Cat products. Runs a number of Fit Cat products including UniSuper, HESTA, AustralianSuper and Insignia Finance.
Chris Brickey, chief executive of StockSpot, said members of the worst-performing super funds could be out of pocket by hundreds of thousands of dollars in retirement.
"Our research found that OnePath is the worst performing super fund in Australia. Unfortunately for those stuck with funds like OnePath and AMP, they are paying high fees and those fees are being absorbed into their income," Mr Brickey said.
"These underperforming super funds continue to raise fees and give poor returns to members. Fees are like termites eating our income, so you won't have much left for retirement.
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"The 'fat cat' list of OnePath products listed in StockSpot's 2022 Fund Report has been closed and is no longer open to new members," an Insignia Financial spokeswoman said.
"Insignia Financial continues to improve these products and deliver better results for members. We have a program in place to bring even more improvements to these members in the near future."
An AMP spokeswoman said the results it quoted for its products included management fees, but returns for several other funds did not, meaning StockSpot's comparison was not compelling.
"When comparing superannuation fund performance, we encourage all Australians to understand the risk characteristics and investment objectives of their fund or investment options," a spokesperson said.
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"For example, we would expect a balanced fund with a 40 percent growth asset allocation to deliver intentionally lower but more consistent returns than a balanced fund with a 60 percent allocation to growth assets."
"We offer a wide range of investment options to members with different risk and return characteristics, allowing members access to high-risk investment options that have delivered double-digit returns over 5 years, while focusing on more conservative options. Protect members. ' market residuals from fluctuations.
Australians could save $245,000 by switching from a super fund that charges 1.5 per cent annual investment fees to one that charges 0.5 per cent a year, according to StockSpot.
Administration fees are another big expense
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