SUPER FUNDS FAILING

Sunday Times 15th May 2016

One of seven “growth” super funds containing a combined $3 billion have made nothing in the past decade, jeopardising the retirement plan of tens of thousands of workers. And nearly half of all share heavy funds have earned less than 1 per cent a year over that time. Today the Sunday Times reveals the best and worst performing funds in the past 10 years. The returns of top funds are average 83 per cent higher than cellar dwellers.

New data from investment research firm Morningstar show 47 of 346 growth funds in operation since 2006 have failed to beat official inflation rate over that time of 2.5 per cent. That means they have not actually added to the wealth of their member. ANZ runs27 of these – 14 under its name and 13 branded One Path. ANZ spokesman Nick Higgin bottom said customers may receive fee rebates which can significantly boost the performance of their investments.

More than 150 of the growth funds tracked by Morningstar have not earned more than 3.5 per cent a year – or 1 per cent.


GOOD AND BAD TOP PERFORMERS (growth)
 Rest Core Strategy…………………………..6.7%
 Care Super Balance………………………….6.31%
 Optimum Corp Sup-Schroder Balanced WS…6.1%
 Optimum Per Sup-Schroder Balanced WS…..6.1%

WORST PERFORMERS (growth)
 One Path OA PS-OP Active Growth NE………..1.38%
 ANZ OA PA-OP Active Growth NE……………1.52%
 AMP – Super Guard 2 – Manage Portfolio…..…1.6%
 AMP RB Prop Biased NEF……………………...1.67%

Above inflation – over the past decade. These funds contain about $16 Billion of workers retirement savings.Thirty-Three funds have delivered average investment returns of 5 per cent or more for the past 10 years, including some of the biggest funds.

The $33 billion retailer employee funds, REST, sits atop the rankings, earning 6.7 per cent a year. It also leads the 10-years returns tables compiled by super ratings for the Sunday Times. Super ratings ranks the $65 billion Australian Super funds seventh, with an average annual return of 5.7 per cent.

SMSF TRUSTEES GET GREEN LIGHT ON RENOVATION

Posted on Jun 21, 2013 5:25pm PDT



A new ruling by the Australian Taxation Office has given self-managed superannuation fund members the ability to use money from inside their fund to renovate their property. Previously, the ATO said SMSFs could not use money from any source to improve property. However, under the draft ruling DIY super funds can now potentially install swimming pools, larger kitchens and add extensions to improve the value of the property. The draft ruling would ultimately make real estate a more attractive option to the $420 billion SMSF sector. “The ATO understands that the future buoyancy of the property market will be heavily dependent on SMSFs’ investing in property as well as providing rental occupancies for younger people. “This new drafted legislation, which will almost certainly become law, addresses everything everyone I have spoken to in the industry has been scratching their heads over.” But while SMSF trustees will be able to renovate using money within their funds, borrowing to renovate will remain prohibited. “Hats off to the ATO — a lot of good things have come out of this draft ruling,” he said. “The fact that you can now renovate, with non-borrowed money, is very good. “But the main problem is that the ATO’s draft ruling neutralises or diminishes the sole purpose test which is to provide retirement benefits to members.” With the ability to manufacture capital growth through renovation a big drawcard for property investors, the same capacity should also be available through SMSFs. “If you’re looking to provide retirement income you should be allowed to maximise it.” (Source-The Adviser)



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