Industry supers show out-performance

Surpassing other super funds in the short, medium and long term, Australia’s infrastructure-hungry industry super funds grew assets over 20 percent last year.

Australia’s approximately A$281 billion (€190 billion; $254 billion) industry superannuation fund sector – which tends to invest heavily in infrastructure – has shown superior returns over short-, medium- and long-term investment horizons, and has managed to grow overall assets by about 21 percent over the past year, according to an Industry Super Network statement.

Returns from the industry super funds’ investments, which include the investments of infrastructure giant Industry Funds Management (IFM), stood at 14.5 percent overall in the last financial year. That puts industry supers ahead of all other Australian regulated superannuation funds, which averaged a 13.9 percent rate of return.

Industry funds consistently outperformed across all investment time periods, according to a second statement. As compared to retail super funds, which are typically owned by banks, industry super funds’ investments showed better returns by between 0.47 percent and 1.83 percent across the 1-year, 3-year, 5-year, 7-year and 10-year investment horizons, according to the SuperRatings’ Fund Credit Rate Survey.

The actual rate of return for industry super funds ranged from 4.79 percent to 17.17 percent, the statement showed. The high performance is one of the primary reasons that the market share of industry super funds has grown to a “record high” of about 20 percent in the past year, according to Industry Super Network chief executive David Whiteley.

Industry fund net contributions have also increased by about 17.7 percent over the past financial year. The market share of the other major superannuation fund sectors – such as retail funds or self-managed super funds – either remained stable or declined slightly in the same period.

“Australians are voting with their feet and flocking to industry super funds,” Whiteley said in the statement. “Our members can be confident of strong, long-term net returns, due in part to industry supers' investment in infrastructure.”

Indeed, Whiteley highlighted industry supers’ “strong investment in infrastructure” as one of the primary factors in their above average returns. Most recently, several small commitments from US pension funds have been secured for the $7.1 billion IFM Global Infrastructure Fund. IFM also recently opened an office in Berlin to further European investments.