Media releases Archives - Page 4 of 7

Media release: Anchoring to your long-term strategy vital during market volatility

Markets continue to display volatility, with the invasion of the Ukraine heightening already elevated geopolitical tensions and supply chain pressures around the world.

Leading superannuation research house SuperRatings estimates that the median balanced option fell by 0.8% in February. However, over the financial year to date members have seen an estimated return of 1.4% for the median balanced option.

Kirby Rappell, Executive Director of SuperRatings commented, “There is a lot of uncertainty across the globe, which is amplifying ups and downs across investment markets. The latest supply shock following the war between Russia and the Ukraine places further pressure on the cost of living and inflation levels and adds to the likelihood interest rate rises are approaching.”

“We continue to reinforce our previous messages regarding the importance of taking a long-term view when it comes to your superannuation. While the latest global events are extremely concerning, most members are decades away from retirement. This means they have time to recover from any volatility incurred in the short-term.”

The median growth option is down an estimated 1.1%. The capital stable option, which includes more defensive assets like bonds and cash, has fared relatively better, falling only 0.6%.

Accumulation returns to February 2022

	Monthly	1 yr	3 yrs (p.a.)	5 yrs (p.a.)	7 yrs (p.a.)	10 yrs (p.a.)
SR50 Balanced (60-76) Index	-0.8%	8.7%	7.4%	7.6%	6.8%	8.5%
SR50 Capital Stable (20-40) Index	-0.6%	3.9%	3.8%	4.1%	4.0%	5.1%
SR50 Growth (77-90) Index	-1.1%	10.0%	8.6%	8.8%	7.5%	9.5%

Source: SuperRatings estimates

Pension returns have also fallen in February, with the median balanced pension option down an estimated 1.0%, compared to a fall of 1.1% for the median growth option and 0.6% for the capital stable option.

Pension returns to February 2022

	Monthly	1 yr	3 yrs (p.a.)	5 yrs (p.a.)	7 yrs (p.a.)	10 yrs (p.a.)
SRP50 Balanced (60-76) Index	-1.0%	8.9%	8.2%	8.2%	7.3%	9.4%
SRP50 Capital Stable (20-40) Index	-0.6%	4.3%	4.3%	4.7%	4.3%	5.6%
SRP50 Growth (77-90) Index	-1.1%	10.1%	9.2%	9.4%	8.3%	10.5%

Source: SuperRatings estimates

Retirees and members approaching retirement are already facing challenges when it comes to deriving a meaningful level of income in retirement, due to ongoing record low interest rate levels. This is compounded by stresses for many of the potential timing of transitioning to retirement.

The key concern for these Australians is the impact of withdrawing their funds at a time when the market has been impacted by some falls in asset prices. Maintaining a long-term view is vital, we encourage people to speak to their fund or financial adviser before making any changes to their superannuation. Knee-jerk reactions could lead to poor outcomes if these aren’t in line with your long-term financial goals.

The typical balanced option has delivered a return of about 8-9% per annum for super and pension members over the last ten years, emphasising that while we have seen negative performance over the month, the longer-term picture remains positive.

Release ends
We welcome media enquiries regarding our research or information held in our database. We are also able to provide commentary and customised tables or charts for your use.

For more information contact:

Kirby Rappell
Executive Director
Tel: 1300 826 395
Mob: +61 408 250 725
Kirby.Rappell@superratings.com.au

March 15, 2022/by Kirby Rappell

Media releases

Media Release: Lonsec announces staff can work from anywhere in the world

Research House Lonsec has announced significant changes to its working policies, in response to the insights gained during the COVID shutdown and feedback from its staff.

The necessity of working from home during the pandemic showed that staff were able to successfully carry out their regular daily tasks from remote locations. It has helped redefine what time in the office actually looks like and what purpose it serves.

Whilst Lonsec still believes that genuine one-to-one interaction with colleagues is extremely valuable in building culture, relationships and sharing knowledge and ideas, this does not need to be every day. As a result, the company is permanently moving to a hybrid model, of at least two days in the office each week, and working from home the other days. For some roles, that do not require regular attendance in the office, employees are able to request a move to ‘remote’ locations and this has resulted in some staff now being located in Queensland.

This ability to work from ‘anywhere’ for short periods, has been extended to all staff, with them now having the option to work from anywhere in the world, for up to 4 weeks per year. This has been particularly welcomed by the many Lonsec team members not originally from Australia, or with family overseas. In further recognition of Lonsec’s cultural diversity, allowance has been made for those team members who may celebrate religious festivals other than those typically recognised with an Australian public holiday, by allowing them to work current public holidays and take off dates of their choosing.

Chief Executive Officer, Michael Wright said “considerable thought and time was put into developing our Lonsec@Work program. We believe strongly in supporting our employees’ broader wellbeing and believe that these significant, and industry leading benefits will enable us to attract and retain the best employees, and to genuinely allow staff to choose and enjoy the work life balance that works best for them”.

Release ends

For more information, contact:
Rob Hardy
Robert.Hardy@lonsec.com.au
1300 826 395

March 3, 2022/by Nicci Chaplin

Media releases

Media release: Long-term focus needed for super

Super fund performance was impacted in January following a turbulent month for domestic and global equities, as rising inflation concerns, and looming rate hikes added to investors’ worries.

Supply shortages relating to COVID-19 have put upward pressure on input costs for companies around the world. As a result, we have seen the price of goods and services such as food, automotive fuel, and healthcare bearing the brunt of the impact.

However, these pressures are hoped to ease as supply chains reopen and as we emerge out of the pandemic. Nonetheless, markets have been spooked by the situation which has resulted in a rocky start to the year for super funds.

According to estimates from leading superannuation research house SuperRatings, the median balanced option returned -2.1% in January following the market sell-off, despite some of the initial losses being recovered towards the end of the month reducing the negative impact.

“Falling interest rates have supported rising asset prices and we have seen extremely strong returns over the past 5, 10 and 20 years. Inflation has been within the RBA’s target for much of this time. However, we are seeing an uptick here which has flow on effects for investment markets and the super balances of Australians,” said SuperRatings Executive Director Kirby Rappell.

Mr Rappell continued “Always remember, only about 50% of investments are in shares so your super should be less volatile if you are in a balanced option or a more conservative option. This means that members sitting in these options are not as affected by the ups and downs in stock markets we have seen recently.”

Super funds still have some way to go before recovering from the latest market drop. The median growth option is down an estimated 2.9%. The capital stable option, which includes more defensive assets like bonds and cash, has fared relatively better, falling only 0.9%.

Accumulation returns to January 2022

	YTD	1 yr	3 yrs (p.a.)	5 yrs (p.a.)	7 yrs (p.a.)	10 yrs (p.a.)
SR50 Balanced (60-76) Index	-2.1%	10.9%	8.7%	8.0%	7.4%	8.7%
SR50 Capital Stable (20-40) Index	-0.9%	4.5%	4.5%	4.4%	4.3%	5.3%
SR50 Growth (77-90) Index	-2.9%	12.6%	10.2%	9.2%	8.3%	9.8%

Source: SuperRatings estimates

Pension returns have also fallen in January, with the median balanced pension option down an estimated 2.3%, compared to a fall of 3.2% for the median growth option and 1.1% for the capital stable option.

Pension returns to January 2022

	YTD	1 yr	3 yrs (p.a.)	5 yrs (p.a.)	7 yrs (p.a.)	10 yrs (p.a.)
SRP50 Balanced (60-76) Index	-2.3%	11.3%	9.6%	8.7%	7.9%	9.7%
SRP50 Capital Stable (20-40) Index	-1.1%	4.9%	5.0%	4.9%	4.7%	5.8%
SRP50 Growth (77-90) Index	-3.2%	13.1%	10.8%	10.0%	9.1%	11.0%

Source: SuperRatings estimates

We saw the RBA maintain the cash rate at 0.1% and signal the end of quantitative easing but this does not mean a rate rise is imminent.

Mr Rappell said “While we have seen super fund performance take a hit this month, it is important that people remember that super is a long-term investment. Trying to time the market can see members end up in a worse position, so it’s best to talk to your fund or an adviser before making any changes.

Looking ahead, it’s likely that we will need to embrace the increased volatility that may come from an increase in rates. This is a big shift given we have become so used to the trend of falling rates over an extended period. We have had a strong decade of super returns and we have been through a variety of market environments since 1992.”

Mr Rappell continued “A couple of things to consider, super funds delivered a return of 13.4% in 2021 and over the long-term super returns have exceeded the typical objective of CPI+3%. It’s about checking you are in the right long-term option and sticking to it. If you had switched to cash at the start of last year you would have seen a return of 0.1% instead of 13.4% for a balanced option”.

Remember, your super fund is focused on helping you to navigate these changing markets. Thinking long-term when it comes to strategy and blocking out shorter-term noise remains the pragmatic approach and is aligned with funds’ approaches.

Release ends

We welcome media enquiries regarding our research or information held in our database. We are also able to provide commentary and customised tables or charts for your use.

For more information contact:

Kirby Rappell
Executive Director
Tel: 1300 826 395
Mob: +61 408 250 725
Kirby.Rappell@superratings.com.au

Require further information? Simply visit www.superratings.com.au

February 14, 2022/by Kirby Rappell

Media releases

Super Funds Deliver $400 billion Windfall to Members in 2021

Super fund performance continued to recover over the second half of 2021, with results for the 2021 calendar year indicating member accounts are likely to receive a windfall of over $400 billion.

2021 was another big year for super, with the median Balanced option seeing a return of 13.4% return for calendar year 2021 and positive returns in 11 out of 12 months.

Since the 2000 calendar year, we have only seen 3 negative calendar year returns (2002: -4.8%, 2008: -19.7%, 2011: -1.9%), as shown below. The annualised return since 2000 sits at around 6.6% pa and is slightly ahead of fund objectives of inflation + 3% over rolling 10 year periods. Over the past 22 calendar years, this year’s estimated return would be the 6^th highest and reflects the buoyant returns in markets.

This year’s return has again been driven by international shares and Australian shares, while property has also supported growth in balances.

The top 20 performing balanced options all returned 13.9% or more to their members over the year. According to data from leading research house SuperRatings, Hostplus – Balanced was the top performing fund over the 2021 calendar year, returning 19.1%. Followed by QANTAS Super Gateway – Growth and Sunsuper for Life – Balanced whose balanced options returned 18.5% and 16.5% respectively.

Top 20 balanced options over 12 months

Rank	Option Name	1 Year %	10 Year %
1	Hostplus – Balanced	19.1	10.7
2	QANTAS Super Gateway – Growth	18.5	9.0
3	Sunsuper for Life – Balanced	16.5	10.2
4	Christian Super – MyEthicalSuper	16.0	9.0
5	TelstraSuper Corp Plus – Balanced	15.9	9.7
6	BT Super for Life – Pendal Sustainable Balanced	15.7	8.7
7	Suncorp Brighter Super Bus – Suncorp Multi-Manager Growth Fund	15.2	–
8	MLC MKey Business Super – Horizon 4 – Balanced Portfolio	15.1	9.3
9	AustralianSuper – Balanced	15.0	10.6
10	Plum – Pre-mixed Moderate	15.0	9.0
11	Vision SS – Balanced Growth	14.8	9.6
12	VicSuper FutureSaver – Growth (MySuper) Option	14.8	10.2
13	HESTA – Balanced Growth	14.5	9.7
14	Aware Super – Growth	14.2	9.9
15	legalsuper – Balanced	14.2	9.3
16	REI Super – Balanced	14.1	8.9
17	CFS-FC Wsale Pers – FirstChoice Wsale Multi-Index Balanced	14.0	9.0
18	Active Super – Balanced	13.9	9.1
19	CSC PSSap – MySuper Balanced	13.9	9.1
20	smartMonday PRIME – Balanced Growth – Active	13.9	9.2
	SR50 Balanced (60-76) Index	13.4	9.2

However, superannuation is a long-term investment, therefore while it is interesting to see which funds performed well over the year, this needs to be considered in relation to performance over longer time periods. That way members can see whether their fund is a consistent strong performer as this is what really counts.

Hostplus – Balanced was the top performer over the long-term, as well as on a 1-year basis, with an average annual return of 10.7% over the last decade. Followed closely by AustralianSuper – Balanced and UniSuper Accum (1) – Balanced which both returned 10.6%.

Top 20 balanced options over 10 years

Rank	Option Name	1 Year %	10 Year % pa
1	Hostplus – Balanced	19.1	10.7
2	AustralianSuper – Balanced	15.0	10.6
3	UniSuper Accum (1) – Balanced	12.5	10.6
4	Cbus – Growth (Cbus MySuper)	13.0	10.3
5	VicSuper FutureSaver – Growth (MySuper) Option	14.8	10.2
6	Sunsuper for Life – Balanced	16.5	10.2
7	Aware Super – Growth	14.2	9.9
8	CareSuper – Balanced	12.6	9.8
9	IOOF Employer Super Core – IOOF MultiMix Balanced Growth Trust	13.6	9.7
10	HESTA – Balanced Growth	14.5	9.7
11	TelstraSuper Corp Plus – Balanced	15.9	9.7
12	Prime Super – MySuper	12.3	9.7
13	Equip MyFuture – Balanced Growth	12.0	9.7
14	Vision SS – Balanced Growth	14.8	9.6
15	Mercy Super – MySuper Balanced	13.3	9.6
16	BUSSQ Premium Choice – Balanced Growth	12.5	9.4
17	Rest – Core Strategy	13.4	9.3
18	legalsuper – Balanced	14.2	9.3
19	Media Super – Balanced	12.9	9.3
20	MLC MKey Business Super – Horizon 4 – Balanced Portfolio	15.1	9.3
	SR50 Balanced (60-76) Index	13.4	9.2

The Bumpiness Factor

With investment markets continuing to exhibit volatile performance compounded by the uncertainty faced around the globe as COVID-19 and its variants persist, it is important to consider the level of bumpiness i.e. the amount of ups and downs in your super account balance that you are comfortable with.

This also depends on what stage of the super journey you are in. For example, if you are younger, you have more time for your balance to recover if there is a dip in performance due to investment markets. Whereas, if you are approaching your retirement, you may not want to risk seeing a sharp dip in your account when you are about to switch to a pension or withdrawing your account balance upon retirement.

The table below shows the top 20 funds ranked according to their volatility-adjusted return, which measures how much members are being rewarded for taking on the ups and downs.

QSuper’s balanced option sits at the top of the table below, which shows that the fund achieved a return of 7.6% p.a. over the past seven years. While this return is below some of its peers, it has achieved this return with less ups and downs along the way.

Rank	Option Name	7 Year %
1	QSuper – Balanced	7.6
2	BUSSQ Premium Choice – Balanced Growth	8.4
3	Prime Super – MySuper	8.6
4	Cbus – Growth (Cbus MySuper)	9.1
5	CareSuper – Balanced	8.5
6	Statewide Super – Active Balanced	8.2
7	Mercy Super – MySuper Balanced	8.6
8	Spirit Super – Balanced (MySuper)	8.6
9	VicSuper FutureSaver – Growth (MySuper) Option	8.7
10	Aware Super – Growth	8.7
11	Sunsuper for Life – Balanced	9.2
12	Hostplus – Balanced	9.7
13	AustralianSuper – Balanced	9.6
14	Media Super – Balanced	8.4
15	Catholic Super – Balanced Growth (MySuper)	8.1
16	IOOF Employer Super Core – IOOF MultiMix Balanced Growth Trust	8.3
17	Vision SS – Balanced Growth	8.9
18	HESTA – Balanced Growth	8.6
19	NGS Super – Diversified (MySuper)	8.1
20	CSC PSSap – MySuper Balanced	7.6
	SR50 Balanced (60-76) Index	8.0

Spotlight on Sustainable Options

There continues to be a brighter spotlight being shone on the types of investments that funds are making, with members desiring greater consideration of environmental, social and governance (ESG) factors. The table below shows the top 10 sustainable balanced options ranked according to their 5 year return.

HESTA’s Sustainable Growth option provided the highest return to members over 5 years for a dedicated sustainable option, with a return of 11.7%. Followed by UniSuper Accum (1) – Sustainable Balanced and Super SA Triple S – Socially Responsible which delivered returns of 10.7% and 9.7% respectively.

Rank	Option Name	5 Year %
1	HESTA – Sustainable Growth	11.7
2	UniSuper Accum (1) – Sustainable Balanced	10.7
3	Super SA Triple S – Socially Responsible	9.7
4	Aust Ethical Pers – Balanced	9.4
5	VicSuper FutureSaver – Socially Conscious Option	9.3
6	CareSuper – Sustainable Balanced	9.1
7	Aust Catholic Super & Ret – Socially Responsible	9.1
8	AustralianSuper – Socially Aware	9.0
9	Sunsuper for Life – Socially Conscious Balanced	9.0
10	Mercer Super Trust – Mercer Sustainable Plus Growth	8.9
	Sustainable Balanced Option Median	8.6

Kirby Rappell, Executive Director of SuperRatings commented, “In the past we typically found that the performance of sustainable options tended to sit materially below standard balanced options. However, in recent years we have seen a shift, with sustainable balanced options performing competitively relative to standard balanced options.”

2021 was certainly an eventful year for Australia’s superannuation members, with a number of changes taking place, as well as a lot more ups and downs across investment markets.

We are seeing funds merging however there continues to be a large number of products across the market – in our latest review we rated over 530 superannuation products. Our product ratings are accessible on our website here.

Mr Rappell said, “With stapling changes taking effect late last year, your fund will now follow you when you change employers, so it’s time to make sure you are in a good one. As you settle into 2022, now is a good time to do a health check on your fund and be sure to look at returns as well as fees and insurance. While all super funds have good years and those that are more challenging, strong long term performance remains the main game for members.”

Mr Rappell continued, “Overall, it has been a big year for super. If we look at the long term, funds continue to perform well against objectives, but it is a likely to be a rockier year ahead. For consumers, it remains important to set your strategy, stick to it for the long term and future you will likely thank you.”

Release ends

We welcome media enquiries regarding our research or information held in our database. We are also able to provide commentary and customised tables or charts for your use.

For more information contact:

Kirby Rappell
Executive Director
Tel: 1300 826 395
Mob: +61 408 250 725
Kirby.Rappell@superratings.com.au

Require further information? Simply visit www.superratings.com.au

January 25, 2022/by Kirby Rappell

Media releases

Media Release: Despite strong equity markets, the challenge for retirees is clear

Analysis by SuperRatings has shown that paying attention to how your superannuation is invested pays dividends. SuperRatings has tracked the returns of the most common super options over the past 10 years with the results displayed in the chart below.

SuperRatings Executive Director, Kirby Rappell, says “A balance of $100,000 in Nov 2011 invested in a typical balanced option would now be worth $248,413, an increase of 148%. Compare that to a member invested in a cash option, whose balance would now be $123,178 – an increase of 23% and a shortfall relative to the balanced option outcome of over $125,000 – which emphasises the challenges for members with significant exposure to cash. While the balances of younger members grow strongly, those members trying to derive an income from their savings face some very real difficulties.”

SuperRatings sees the majority of pension assets sitting in Balanced, Conservative Balanced and Capital Stable options, with the latter two investing more in bonds and cash like investments. The median conservative balanced option grew to $210,292, while growth was more muted for capital stable members and those invested mainly in bonds through the typical diversified fixed interest option. There was a dip in balances due to the pandemic, with older members in more conservative options less impacted than growth focused accumulation members.

Looking at cash options more closely, over the last 10 years, a member sitting in cash would have seen a return of only 2.2% per annum. Mr Rappell continues “The experience of many Australians with exposure to cash has been extremely challenging. Reviewing your risk profile remains important, as retirees need to ensure they are invested in a way that helps them achieve their long-term objectives. We also need to see greater innovation in this space to ensure that super funds are able to help retirees achieve appropriate outcomes in retirement.”

SuperRatings recommends members consult their fund or an adviser they trust to help ensure any decision on how their super is invested is part of a long-term strategy.

November returns

November was another positive month for superannuation, as confidence remained high with vaccination rates hitting 90% and the economy opening up further. According to SuperRatings’ data, the median balanced, growth and capital stable options all rose an estimated 0.3% in November, with the balanced option returning an estimated 11.4% for the calendar year to date and the growth option returning an estimated 14.1% over the same period. However, returns for the past 6 months have been more muted, albeit positive, with greater volatility observed.

Accumulation returns to November 2021

	FYTD	1 yr	3 yrs (p.a.)	5 yrs (p.a.)	7 yrs (p.a.)	10 yrs (p.a.)
SR50 Balanced (60-76) Index	2.7%	12.7%	9.4%	8.5%	7.9%	9.0%
SR50 Capital Stable (20-40) Index	1.2%	5.3%	5.0%	4.7%	4.7%	5.5%
SR50 Growth (77-90) Index	3.3%	15.4%	11.1%	9.9%	8.9%	10.3%

Source: SuperRatings estimates

Pension returns were also positive in November. The median balanced pension option returned an estimated 0.3% over the month and 12.0% over the calendar year to date. The median pension growth option also returned an estimated 0.3% and the median capital stable option gained an estimated 0.4% through the month. Further, our latest estimates of the performance for the calendar year to date are 15.1% and 12.0% for the typical growth and capital stable options respectively.

Pension returns to November 2021

	FYTD	1 yr	3 yrs (p.a.)	5 yrs (p.a.)	7 yrs (p.a.)	10 yrs (p.a.)
SRP50 Balanced (60-76) Index	2.7%	13.3%	10.3%	9.3%	8.4%	9.9%
SRP50 Capital Stable (20-40) Index	1.3%	5.7%	5.6%	5.3%	5.0%	6.0%
SRP50 Growth (77-90) Index	3.4%	16.5%	11.9%	10.8%	9.8%	11.4%

Source: SuperRatings estimates

Release ends

We welcome media enquiries regarding our research or information held in our database. We are also able to provide commentary and customised tables or charts for your use.

For more information contact:

Kirby Rappell
Executive Director
Tel: 1300 826 395
Mob: +61 408 250 725
Kirby.Rappell@superratings.com.au

Require further information? Simply visit www.superratings.com.au

December 15, 2021/by Kirby Rappell

Media releases

Media Release: Top KiwiSaver Schemes for 2022

SuperRatings is excited to announce its top-rated KiwiSaver schemes for 2022. The market continues to be extremely competitive, with fees and performance being key drivers of changes in ratings outcomes over the year. Eight providers were awarded a ‘Platinum’ rating for 2022.

SuperRatings’ assessment criteria considers five key factors, including investments, fees, member servicing, scheme administration and governance. Schemes awarded a Platinum rating are well balanced across all key assessment criteria. We believe these schemes are well placed to deliver strong value for members and enhance retirement outcomes relative to their peers.

The industry eagerly awaited the results of the Financial Market Authority’s default tender review over the past year and Dec 1 marked the transition to the providers selected for 2021 to 2028. We are supportive of the movement from a default conservative fund to a balanced fund, with members benefiting from greater exposure to growth assets such as Australasian and Global Shares, which generate higher returns for members over the long run.

The focus on fees remains strong in both the Australian and New Zealand markets, we have seen fees decrease among KiwiSaver schemes, with fee reductions for percentage-based annual management fees and decreases or abolishment of member fees common themes.

We continue to believe in the importance of examining performance and fees together and do so through our Net Benefit research. This modelling allows us to examine the dollar outcome a member receives in their account taking into consideration their Scheme’s investment performance and the impact of fees. An interesting trend we have observed in Australia is the strong net benefit outcomes of some ESG and sustainable investments, an area previously considered to come at a higher cost with lower returns.

Further, the conversation about ESG and sustainability has become louder, with several superannuation funds in Australia, as well as New Zealand Schemes making commitments to achieve net zero emissions by 2050. It has been pleasing to see the progress made here through Mindful Money’s Aotearoa New Zealand Investor Coalition for Net Zero.

We acknowledge that members have faced a bumpy ride over the last few years coupled with uncertainty due to ongoing lockdowns. It has been really pleasing to see the support provided by schemes over this period to provide reassurance to members and education regarding the KiwiSaver environment. As businesses across the country had to adapt to lockdowns and working from home, we also saw KiwiSaver schemes adapting to the new world.

Kirby Rappell, Executive Director of SuperRatings commented, “Member seminars are now offered online by 80% of schemes that engaged with us through our 2021 review and through our discussions with providers this style of communication is going to remain a key channel for engagement with members. Content typically includes KiwiSaver 101 sessions, how to select a suitable fund, information on member contributions, the impacts of fund choice and contributions on your potential retirement balance, investment updates and information for first home buyers.”

Kirby Rappell continued, “A silver lining of the pandemic has been the leaps and bounds made in terms of connecting with people through online platforms such as video calling and webinars. There is a wealth of information now being provided to help members with their KiwiSaver, as well as general financial help such as budgeting and lifestyle planning. Short and engaging videos really resonate with people by providing complex information in bite sized, easy to understand segments.”

We have also seen the use of digital channels gaining traction, with the majority of schemes offering mobile apps and over a third providing live chat, with a focus on ensuring the best experience for members when using these channels through ongoing enhancements.

We look forward to seeing how the KiwiSaver market progresses as the transition to the new default providers occurs and new entrants and existing providers evolve.

SuperRatings’ Scheme Rating Criteria

Platinum Rated Schemes

ASB KiwiSaver Scheme
BNZ KiwiSaver Scheme
Fisher Funds KiwiSaver Scheme
Fisher Funds TWO KiwiSaver Scheme
Kiwi Wealth KiwiSaver Scheme
Mercer KiwiSaver Scheme
Milford KiwiSaver Plan
Westpac KiwiSaver Scheme

Lonsec Gold Rated Schemes

AMP KiwiSaver Scheme
ANZ Default KiwiSaver Scheme
ANZ KiwiSaver Scheme
Aon KiwiSaver Scheme
Booster KiwiSaver Scheme
Generate KiwiSaver Scheme
New Zealand Defence Force KiwiSaver Scheme
OneAnswer KiwiSaver Scheme
Simplicity KiwiSaver Scheme

Release ends

We welcome media enquiries regarding our research or information held in our database. We are also able to provide commentary and customised tables or charts for your use.

For more information contact:

Kirby Rappell
Executive Director
Tel: 1300 826 395
Mob: +61 408 250 725
Kirby.Rappell@superratings.com.au

Require further information? Simply visit www.superratings.com.au

December 7, 2021/by Kirby Rappell

Media releases

Super funds on track to deliver double-digit returns for 2021

October was another positive month for superannuation, as confidence was high, in anticipation of lockdowns lifting and the economy opening up further. According to SuperRatings’ data, the median balanced option rose an estimated 0.7% in October, with the median growth option rising by a similar amount. While the median capital stable option was flat returning 0.0% in the month.
The 2021 calendar year to date has shown robust growth, with the median balanced option up 11.2%. This result remains well in excess of funds’ objectives and suggests funds are likely to record another year of healthy returns for members. SuperRatings Executive Director, Kirby Rappell, says “2021 has been a strong year for superannuation, with returns nearly three and a half times those of calendar year 2020 and almost double the yearly average for the past 20 years.”

Accumulation returns to October 2021

	FYTD	1 yr	3 yrs (p.a.)	5 yrs (p.a.)	7 yrs (p.a.)	10 yrs (p.a.)
SR50 Balanced (60-76) Index	2.5%	18.0%	9.1%	8.7%	8.0%	8.8%
SR50 Capital Stable (20-40) Index	0.9%	7.1%	4.8%	4.6%	4.6%	5.4%
SR50 Growth (77-90) Index	2.9%	22.2%	10.6%	10.2%	9.0%	10.0%

Source: SuperRatings estimates

Pension returns were also positive in October. The median balanced pension option returned an estimated 0.7% over the month and 11.7% over the calendar year to date. The median pension growth option returned an estimated 0.8% and the median capital stable option gained an estimated 0.1% through the month.

Pension returns to October 2021

	FYTD	1 yr	3 yrs (p.a.)	5 yrs (p.a.)	7 yrs (p.a.)	10 yrs (p.a.)
SRP50 Balanced (60-76) Index	2.5%	19.3%	9.9%	9.6%	8.6%	9.8%
SRP50 Capital Stable (20-40) Index	1.0%	7.8%	5.4%	5.3%	5.1%	5.9%
SRP50 Growth (77-90) Index	2.9%	24.1%	11.6%	11.1%	10.0%	11.2%

Source: SuperRatings estimates

November 1 also marked the beginning of the government’s new stapling legislation, intended to prevent multiple accounts being created for members when they move employers. The new stapled fund will be a member’s super fund for life, following them as they change employers, and will mean that employers will need to check with new employees if they have an existing superannuation account before creating a new super fund account for them.

Mr Rappell comments “While this legislation will cut down on members having multiple super accounts, it is really important that members check which fund they are stapled to, to see if its performance stacks up and fees are competitive, as this could have a significant impact on their final retirement account balance.”

SuperRatings also suggests making sure the insurance cover offered by your stapled fund is suitable for you, as one of the benefits of default super accounts created with each employer was that insurance may have been tailored to the workplace. “If you are unsure what insurance cover is suitable for you, many funds provide insurance needs calculators that can help and also offer advice services,” concludes Mr Rappell.

Release ends

We welcome media enquiries regarding our research or information held in our database. We are also able to provide commentary and customised tables or charts for your use.

For more information contact:

Kirby Rappell
Executive Director
Tel: 1300 826 395
Mob: +61 408 250 725
Kirby.Rappell@superratings.com.au

Require further information? Simply visit www.superratings.com.au

November 15, 2021/by Kirby Rappell

Lonsec Retirement Perspectives, Media releases, News & Insights

Accessing Advice Helps Drive Better Retirement Lifestyle

With half the country in what seems never ending rounds of lockdowns and pandemic fatigue setting in, one of the last things most Australians want to do is look at their Superannuation balances and investment options. That is, however, exactly what SuperRatings is wanting us to do, as neglecting your super or responding to short term market moves can have a detrimental effect on your super balance.

SuperRatings Executive Director Kirby Rappell says, ‘We looked at the impact of switching out of a balanced or growth option and into cash at the start of the pandemic and found that those with a balance of $100,000 in January 2020 and who switched to cash at the end of March would now be around $22-27,000 worse off than if they had not switched.’

This effect of switching into cash as a response to market turmoil is also seen when looking at returns over the past 15 years. In this period, a typical balanced Super option has risen substantially, with a balance of $100,000 in July 2006 accumulating to $247,557, more than doubling in size. Those members investing in a growth option have experienced an even stronger result, with a similar starting balance growing to $254,006. Share focused options have delivered the highest returns, with the median Australian shares option growing to $276,099 and the median international shares option growing to $271,051, though these types of options involve greater risks. Over the same period, a $100,000 balance invested in cash would only be worth $151,158 today.

When considering your Super options, you don’t need to go it alone as many Super funds provide advice and tools to their members. Says Mr Rappell, ‘Most funds will offer scaled advice for free or at a low cost, with members able to get advice on topics such as contributions, investment options, insurance in the fund and the transition to retirement.’ Scaled advice is general in nature so you will need to check if your situation and goals align with the advice.
Continues Mr Rappell, ‘For members who want more tailored advice, some funds will offer comprehensive advice that will also take into account your financial assets outside of superannuation.’ While there will be a cost associated with this comprehensive advice, most funds will allow the cost of the advice to be deducted from the superannuation account, just make sure you check any costs and how they can be paid before agreeing to get the advice.
Looking at more recent returns, balances continued to grow in July. The typical balanced option returned an estimated 1.3% over the month and 18.5% over the year. The typical growth option returned an estimated 1.3% for the month and the median capital stable option also increased 0.9% in the month.

Accumulation returns to July 2021

	FYTD	1 yr	3 yrs (p.a.)	5 yrs (p.a.)	7 yrs (p.a.)	10 yrs (p.a.)
SR50 Balanced (60-76) Index	1.3%	18.5%	7.9%	8.4%	8.0%	8.6%
SR50 Capital Stable (20-40) Index	0.9%	7.8%	4.5%	4.5%	4.8%	5.3%
SR50 Growth (77-90) Index	1.3%	22.7%	9.2%	9.5%	8.9%	9.6%

Source: SuperRatings estimates

Pension returns were also positive in July. The median balanced pension option returned an estimated 1.3% over the month and 20.0% over the year. The median pension growth option returned an estimated 1.5% and the median capital stable option also rose an estimated 0.9% in the month.

Pension returns to July 2021

	FYTD	1 yr	3 yrs (p.a.)	5 yrs (p.a.)	7 yrs (p.a.)	10 yrs (p.a.)
SRP50 Balanced (60-76) Index	1.3%	20.0%	8.4%	9.1%	8.5%	9.5%
SRP50 Capital Stable (20-40) Index	0.9%	8.6%	5.2%	5.2%	5.2%	5.9%
SRP50 Growth (77-90) Index	1.5%	24.4%	9.7%	10.3%	9.8%	10.6%

Source: SuperRatings estimates

Release ends

Warnings: Past performance is not a reliable indicator of future performance. Any express or implied rating or advice presented in this document is limited to “General Advice” (as defined in the Corporations Act 2001(Cth)) and based solely on consideration of the merits of the superannuation or pension financial product(s) alone, without taking into account the objectives, financial situation or particular needs (‘financial circumstances’) of any particular person. Before making an investment decision based on the rating(s) or advice, the reader must consider whether it is personally appropriate in light of his or her financial circumstances, or should seek independent financial advice on its appropriateness. If SuperRatings advice relates to the acquisition or possible acquisition of particular financial product(s), the reader should obtain and consider the Product Disclosure Statement for each superannuation or pension financial product before making any decision about whether to acquire a financial product. SuperRatings research process relies upon the participation of the superannuation fund or product issuer(s). Should the superannuation fund or product issuer(s) no longer be an active participant in SuperRatings research process, SuperRatings reserves the right to withdraw the rating and document at any time and discontinue future coverage of the superannuation and pension financial product(s).

Copyright © 2021 SuperRatings Pty Ltd (ABN 95 100 192 283 AFSL No. 311880 (SuperRatings)). This media release is subject to the copyright of SuperRatings. Except for the temporary copy held in a computer’s cache and a single permanent copy for your personal reference or other than as permitted under the Copyright Act 1968 (Cth.), no part of this media release may, in any form or by any means (electronic, mechanical, micro-copying, photocopying, recording or otherwise), be reproduced, stored or transmitted without the prior written permission of SuperRatings. This media release may also contain third party supplied material that is subject to copyright. Any such material is the intellectual property of that third party or its content providers. The same restrictions applying above to SuperRatings copyrighted material, applies to such third party content.

August 20, 2021/by Nicci Chaplin

Media releases

Ambitious targets for the new Lonsec CEO

Lonsec has welcomed key senior appointments with Mike Wright joining as CEO and Kevin Brennan as Chief Information Officer (CIO). These appointments follow the recent renewal of the Lonsec board.

Mike has over 25 years’ experience in leading businesses and teams within Financial Services and joined from Xplore Wealth Ltd (ASX: XPL.AX), where he was CEO and successfully led the friendly takeover to Hub24 (ASX: HUB.AX), a leading independent investment platform.

Mike has set himself an ambitious challenge for his first 100 days with the business, meeting with all 100+ employees, key partners and clients and says, ‘At a time when the financial services industry is going through so much change, it is incredibly exciting and reassuring to join a company like Lonsec that is so committed to supporting Advisers and Funds through industry changes.’

Mike joins at a dynamic time for Lonsec, with the Lonsec Managed Accounts hitting $2bn funds under management in July 2021 (up from $1bn FUM in October 2020), as well as being fittingly placed to support Advisers and their clients focus on sustainable and ethical investment strategies.

Lonsec has been at the forefront of supporting increased investor appetite for sustainable and ethical investments that also provide a solid return. In response, they developed the Lonsec Sustainable Managed Accounts to provide greater choice for clients seeking investment strategies that align with their personal values and demonstrate strong environmental, social and governance (ESG) practices.
Unique in the market, Lonsec Sustainable Managed Accounts combines both ESG, which focus on the underlying manager’s process to ESG factors and Sustainability measures, which focuses on the funds positive impact on the world.

The Lonsec Sustainable Managed Accounts have just been added to the Macquarie Wrap Platform and are also available on Hub24 and Netwealth.

Lonsec is also fulfilling its thought leadership mandate by launching a Sustainability program to continue to educate investors. Lonsec’s Head of Sustainability, Tony Adams says ‘With the Lonsec Sustainability program, we want to help financial advisers and their clients take a sustainable approach to investing by sharing insights and research powered by Lonsec and a range of industry leaders.’ Via webinars and articles, the Lonsec Sustainability program has recently covered subjects such as ‘greenwashing’ and how Advisers can start sustainable investing conversations with their clients. This is a partner program to the long running Lonsec Retire program, now in its ninth year.

Kevin Brennan is excited to be joining Lonsec as Chief Information Officer. Kevin brings more than 20 years’ experience running large technology teams in the wealth industry. His key focus will be to elevate the role of technology within Lonsec and drive a comprehensive technology and data strategy to transform its service architecture and further accelerate business growth.

Mike concludes, ‘We are so fortunate to be in a strong position to continue to honourably help Advisers, Managers and investors with insights and solutions to help them navigate the immense challenges that many of them face and share in common.’

RELEASE ENDS

For more information, contact:

Rob Hardy
Robert.Hardy@lonsec.com.au
1300 826 395

August 19, 2021/by Nicci Chaplin

Insights, Media releases

Media release: Stellar FY21 returns as super funds deliver for their members

The 2021 financial year saw a rapid recovery from the economic downturn, followed by ongoing growth as confidence soared on the back of the development of COVID-19 vaccines. This led to the hope of a return to a more normal lifestyle, with superannuation funds riding the market highs to deliver some of the best returns members have seen since superannuation was introduced.

With super funds finalising their reporting for June 2021, the strength of the market rebound is clear. The top 20 performing balanced options all returned over 18% to their members over the year, a result that nobody would have predicted 12 months ago.

According to data from leading research house SuperRatings, QANTAS Super Gateway – Growth was the top performing fund over the 2021 financial year, returning 22.0%. This was followed by BT Panorama Full Menu – BT Wholesale Multi-manager and Hostplus whose balanced options returned 21.4% and 21.3% respectively.

Top 20 balanced options over 12 months

Source: SuperRatings

While extraordinary performance over the last 12 months is to be acknowledged, long-term returns are what really count. Here is where members can see which funds have consistently delivered quality returns.

The top performers over ten years were AustralianSuper, whose balanced option has returned 9.73% p.a. over the last decade, followed closely by Hostplus – Balanced and Cbus – Growth (Cbus MySuper) returning 9.67% and 9.6% respectively.

Top 20 balanced options over 10 years

Source: SuperRatings

COVID-19 introduces market downturns to the next generation of investors

Before the impact of the COVID-19 pandemic, the globe had seen the longest run of growth in its history. As a result, the market crash in February 2020 would have been the first time younger investors experienced such a significant and sharp fall in their wealth. Increasingly, investors are acknowledging the importance of not only the return that an option delivers but also the level of risk it takes on to achieve that return.

One way to examine this is looking at the ups and downs in returns over time. Growth assets like shares may return more on average than traditionally defensive assets like fixed income, but this comes with a bumpier ride.

The table below shows the top 20 funds ranked according to their volatility-adjusted return, which measures how much members are being rewarded for taking on the ups and downs.

QSuper’s balanced option return of 8.1% p.a. over the past seven years is below some of its peers, but it has achieved this with a smoother ride along the way, meaning it has delivered the best return given the level of volatility involved.

Top 20 balanced options over 7 years ranked by risk and return

Option Name	Risk Ranking	7 Yr Return (p.a.)
QSuper – Balanced	1	8.1%
BUSSQ Premium Choice – Balanced Growth	2	8.5%
Prime Super – MySuper	3	8.7%
CareSuper – Balanced	4	8.7%
Cbus – Growth (Cbus MySuper)	5	9.2%
Spirit Super – Balanced (MySuper)	6	8.7%
Catholic Super – Balanced Growth (MySuper)	7	8.4%
Aware Super – Growth	8	8.6%
VicSuper FutureSaver – Growth (MySuper) Option	9	8.6%
AustralianSuper – Balanced	10	9.6%
Mercy Super – MySuper Balanced	11	8.3%
CSC PSSap – MySuper Balanced	12	8.0%
Media Super – Balanced	13	8.3%
Sunsuper for Life – Balanced	14	8.9%
Hostplus – Balanced	15	9.5%
NGS Super – Diversified (MySuper)	16	8.1%
Vision SS – Balanced Growth	17	8.8%
HESTA – Balanced Growth	18	8.5%
Active Super – Balanced Growth	19	8.0%
Equip MyFuture – Balanced Growth	20	8.5%

Source: SuperRatings

Sustainable options keep pace with the market recovery

Sustainable investments are becoming increasingly appealing to a broad range of investors, as the impacts of businesses on people and places becomes more widely accepted.

While a relatively recent addition to many funds’ portfolios, long-term returns remain crucial when looking at sustainable options. The table below shows the top 10 sustainable balanced options ranked according to their 5 year return.

SuperRatings data shows that HESTA’s Sustainable Growth option provided the highest return to members over 5 years for a dedicated sustainable option, with a return of 11.8%. This was 1.2% more than the highest balanced option return over the same period. This was followed by the UniSuper Accum (1) – Sustainable Balanced and VicSuper FutureSaver – Socially Conscious options which returned 10.2% and 9.8% respectively.

Top 10 sustainable balanced options over 5 years

Source: SuperRatings

“Overall, returns for the 12 months to June 2021 should provide everyday Australians with confidence that super funds have capitalised on the market recovery, while also performing well during the sell-off in March 2020”, said SuperRatings Executive Director Kirby Rappell.

Mr Rappell continued “while we saw funds that had a high exposure to equity markets fall dramatically when the pandemic first hit markets in February, these were the same funds that then rebounded strongly as markets recovered.

In saying that, it has been the year of domestic and global shares and listed property as key drivers of performance.”

The funds that have performed well on a 10 year basis followed a range of approaches. We have seen funds pursuing alternatives continue to perform well, although we expect to see a greater emphasis on asset allocation in coming years as funds look to drive down costs over the long term.

Mr Rappell commented, “a really interesting trend has been the evolution of funds’ sustainable options. In the past, the average sustainable option’s return tended to lag the standard balanced option. However, in more recent times, these options have performed well with the top performing options surpassing their typical balanced style counterparts in some cases.”

The key message here for funds and members is to take the time to think about your long-term strategy. The recent pandemic has reinforced the importance of setting up your super in the best way, to ensure you are on track for your retirement. Volatility will come and go, but having a long-term strategy is what will give you the comfort and confidence to ride it out.

Release ends

Warnings: Past performance is not a reliable indicator of future performance. Any express or implied rating or advice presented in this document is limited to “General Advice” (as defined in the Corporations Act 2001(Cth)) and based solely on consideration of the merits of the superannuation or pension financial product(s) alone, without taking into account the objectives, financial situation or particular needs (‘financial circumstances’) of any particular person. Before making an investment decision based on the rating(s) or advice, the reader must consider whether it is personally appropriate in light of his or her financial circumstances, or should seek independent financial advice on its appropriateness. If SuperRatings advice relates to the acquisition or possible acquisition of particular financial product(s), the reader should obtain and consider the Product Disclosure Statement for each superannuation or pension financial product before making any decision about whether to acquire a financial product. SuperRatings research process relies upon the participation of the superannuation fund or product issuer(s). Should the superannuation fund or product issuer(s) no longer be an active participant in SuperRatings research process, SuperRatings reserves the right to withdraw the rating and document at any time and discontinue future coverage of the superannuation and pension financial product(s).

Copyright © 2021 SuperRatings Pty Ltd (ABN 95 100 192 283 AFSL No. 311880 (SuperRatings)). This media release is subject to the copyright of SuperRatings. Except for the temporary copy held in a computer’s cache and a single permanent copy for your personal reference or other than as permitted under the Copyright Act 1968 (Cth.), no part of this media release may, in any form or by any means (electronic, mechanical, micro-copying, photocopying, recording or otherwise), be reproduced, stored or transmitted without the prior written permission of SuperRatings. This media release may also contain third party supplied material that is subject to copyright. Any such material is the intellectual property of that third party or its content providers. The same restrictions applying above to SuperRatings copyrighted material, applies to such third party content.

July 21, 2021/by Kirby Rappell