However, Chant West senior investment research manager Mano Mohankumar cautioned fund members not to get carried away with the strong returns, which look “unsustainable.”
“We expect more challenging times ahead,” he said. “Given the tremendous run investment markets have had for over a decade, most asset sectors are fully valued, or close to it.”
Kirby Rappell (pictured), executive director of SuperRatings, agrees.
“Growing wealth in this environment while protecting members’ capital is a tall order,” Mr Rappell said. “Whether it’s the US-China trade conflict, the weaker economic outlook, falling interest rates, or the rolling Brexit saga, there is a lot for funds to take in.”
He said a growing trend for funds to push into alternative investments, such as private market assets and hedge funds, can provide an important source of diversification and downside protection for funds when markets take a turn for the worse.
“However, funds should be clear about their alternatives strategies and the risks they could potentially add to members’ portfolios, Mr Rappell said.
Women’s equality still falling short
A new report by HESTA outlines challenges being experienced by the fund’s predominantly women membership, most of whom work in the health and community services sector.
It found persisting discrimination and inequality in work and pay is leaving women with greater financial vulnerability throughout their lives.
Two trial reasons why women retire with, on average, 40 per cent less super than men are unequal pay and unpaid time out of the workforce to start a family or care for others. Women, on average, still experience a 14 per cent pay gender gap.
HESTA chief executive Debby Blakey said women should not be penalised financially when they retire. “We’re strong supporters of measures to improve the super system so women can perform these vital roles that make such an important contribution to our society and economy,” she said.
Account mergers on track
Assistant Minister for Superannuation, Financial Services and Financial Technology Jane Hume has confirmed that by the end of October, more than 2.3 million inactive, low-balance super accounts had been transferred to the Australian Taxation Office for consolidation with members’ “live” funds.
“More than $1.2 billion from these accounts has already been matched with other accounts,” she recently told the Association of Superannuation Funds of Australia conference in Melbourne.
Under the government’s Protecting Your Super legislation, multiple super accounts that have not received a contribution for 16 months and have a balance below $6000 are being consolidated to ensure retirement savings aren’t swallowed up by fees or insurance premiums costs.
ATO data show that there is more than $20.8 billion in lost and unclaimed super across Australia.