How does this non-industry fund beat other superannuation funds over the long term?
One of the smallest superannuation funds in terms of member numbers has been beating all others over the long term, and it isn’t an industry fund. What is its secret?
Financial institution Goldman Sachs & JBWere’s (GSJBW) superannuation fund has only 1867 members with total assets of $471,237,000.
According to SuperRatings chief executive Kirby Rappell, the fund is not open to the public as it is specifically for its employees.
While most of the investments within it are in Goldman Sachs & JBWere’s own managed funds, it does have the MySuper stamp of approval.
“Even though it invests aggressively in high-growth assets that carry more risk, over the long term it pays off for this fund,” Mr Rappell said.
Although many funds returned in the double digits last year, the GSJBW managed only 9.2 per cent. But, as Mr Rappell says, the best way to get a feel for how a fund is performing is to look at its longer view.
Figures from the Australian Prudential Regulatory Authority (APRA) show that GSJBW’s return over five years was a handsome 13.2 per cent, beating all other funds’ performance and almost a clear two percentage points ahead of the next best placed, UniSuper.
UniSuper returned 11.4 per cent over the same period, beating all other industry funds. An Australian titan, it has $63 billion under management and 421,700 members in the higher education and research sector.
However, as clever as our academics are, clearly their pay packets (and thus nest eggs) are a little lighter than their cousins in high finance. The average amount in a GSJBW super fund is $226,000 compared with the average UniSuper balance of $135,000.
Across the 10-year term, GSJBW returned seven per cent. While this may not appear stellar, it was the best performance of all the super funds across that period, according to the APRA figures. Plus it was more than one percentage point better than the next best, which was again UniSuper, with returns of 5.8 per cent over 10 years.
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