Members need to keep 'reasonable expectations' for returns

Members are being encouraged to have “reasonable expectations” for growth, after super funds saw strong performance in the last financial year.

Data from Chant West showed the median growth super fund returned 18% – the best in the last 24 years – while Super Ratings data showed the top 20 balanced super funds also returned above 18%.

Speaking at the Australian Council of Superannuation Investors (ACSI) conference, Damien Graham, Aware Super chief investment officer (CIO), said they always wanted members to retain a long-term view.

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“From my perspective, we’re always trying to ensure members have reasonable expectations and a long-term view of what they need from their super or their retirement savings,” Graham said.

“Twelve months ago, we were having a very different conversation with very weak returns, so we’ve seen a very strong rebound and a strong return for members in the last financial year.

“But that long-term view and making sure people are attached to what they need on a long-term basis will try to ensure they don’t have too high an expectation after a strong year – or too negative of an expectation after a weaker year – because both can be quite damaging.”

When it came to how the COVID-19 pandemic had changed the investment landscape, Graham said the biggest observation was how some sectors had pulled growth forward.

“If you look at the sectors that have done really well, there’s been some structural changes,” Graham said.

“Online retailing is an example, where there’s been a very strong pull forward of what was a long-term trend.

“Some people have suggested five years of changes happened in a quarter last year, with regards to online retailing and logistics.

“But we’re in a period of longer-term where rates are likely to stay low and that means there will be a different way of creating economic growth.

“That’s a medium-term issue, rather than just the short-term cyclical issues we’re seeing, as well as the structural issues.”

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I don't want to break your heart but you are supporting a fraudulent narrative. It is not possible to compare any of these returns.The whole charade returns on funds. Industry super funds as a group do as they please with members’ money, the biggest single asset for most outside the family home – and there is no way for even the educated to understand what is being risked with your retirement savings. They have no credible risk measures – they regularly use semantics to ignore the fact that they have taken on massive risks. To the unsuspecting in their product description – balanced with Aust Super being one of the more obvious exceptions in any other world connected to reality is 50/50 – at the most 60/40 growth to defensive, assets The biggest laugh that follows this now is that the bully boys are seeking to whittle away – “poorly performing industry funds”. Lordy, it is like speaking with children. A pure performance return as an indicator of virtue is entirely meaningless – and the way the industry funds use it is arguably fraudulent. To describe any investments return this way is lunacy. The accepted measures, – measures of risk include standard deviation, beta, value at risk (VaR), and conditional value at risk (CVaR). Quite literally they may well have held people’s retirement savings in Bitcoin and the like for all the transparency of current semantics. The SAA is moved all the time, unlisted assets – all have the hallmark of we know better. – Patriarchal approach. Any competent individual understands return is directly related to risk. (and if they don't understand this and don't describe this – well you need to seek them out and then educate your account holders - note to industry funds you hold people retirement savings in trust - not in ownership = equals they are not yours to play with) Why do we not see risk measures against these standard metrics and from that a credible measure of performance is able to be ascertained. As always sunlight is a great disinfectant.

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