Another unbalanced super article.

I was rather annoyed by the article today in the SMH about returns from industry funds versus retail.

Not because industry funds do not perform better than retail, but because the rankings from SuperRatings are not comparing like for like.

The 'Balanced' option from Hostplus (which had the highest return) has a 75/25 growth/defensive split.

5. How we invest your money

That is not what I would call Balanced. Vanguard's Balanced fund is 50/50.

Even more problematic, they have zero allocated to cash or fixed interest. Instead they seem to consider Property, Infrastructure, Private Equity and Alternatives to be defensive.

I suspect their customers will be rudely surprised in a nasty downturn.

 

It always pays to dig a bit more deeply rather than relying on statistical tables where the comparison basis can be too broad.

We are comfortable remaining in the “balanced” option when advice for our age group is to be more conservative. This is because our fund’s balanced mix is more defensive than the average.

 

Property & infrastructure are defensive assets. How could they not be?

Commercial buildings which are multi-tenanted with a WALE of 5 years+ don't fluctuate on a daily basis, they are chunky/cumbersome assets and do not transact freely, these are held for the long term, attract stable tenants with quality covenants.

Infrastructure - built by government/PPP to meet a need in the community. Generally very low risk.

 

Likewise. My QSuper Balanced has a strikingly more balanced allocation than Hostplus. I'm happy at my age to give up .8% in returns for less volatility.

 

How does 'balanced' compare to C-Bus conservative options? @ 26/11.5%

Conservative currently has 40% fixed interest, 20% cash vs Conservative Growth

 

.....Read the PDS.

Sadly few people do as its a lengthy document that exceeds many peoples attention span. Many people also dont realise you can build a fund with more than one strategy eg 50% cash, 25% growth and 25% conservative. Then they find they are exposed to 25.75% shares if they used the above as a guide and 65.75 exposed to cash. Then they discuss and consider it further and find that the infastructure and other debts categories are also listed securities....