Our CEO Ross piper shares his thoughts on the recently launched YourSuper comparison tool.
On 1 July, the Australian Taxation Office released a new superannuation comparison tool called YourSuper, which is designed to help people compare the fees and investment performance of MySuper products. The tool has already received a fair amount of media attention, and some of our members have reached out to us in recent weeks, asking questions about our fees and investment performance. To address these concerns, we’ve prepared this short article with some further information.
Christian Super members have impact and influence with their super
Firstly, I want to remind our members of the extraordinary impact and influence that they have when it comes to the way the world uses money.
We invest our members’ money responsibly and in line with Biblical principles, which enables them to have a positive impact in the world while saving for their retirement. In addition to investing in shares, property and infrastructure, a meaningful proportion of the money we invest is specifically designed to deliver a positive social or environmental impact as well as a financial return. This is known as ‘impact investing’ – click here to read more about the impact that our members are having all around the world.
However, the impact that our 30,000 members have goes well beyond the $2 billion that they have collectively invested with us. Christian Super has been a global pioneer in impact investing since we made our first impact investment back in 2006. In addition to our own impact portfolio, which is current worth around $150 million, Christian Super has also been a catalyst for other global pension funds and investment managers to allocate more of the world’s money into these particular types of investments, thereby having a meaningful positive impact on many people all around the world, all whilst still delivering healthy risk-adjusted financial returns for members.
We’ve reduced fees three times in the last two years and we’re working on further reductions
We aim to keep fees as low as possible, while still providing a helpful and distinctly Christian service to our members. While our focus is providing value for money rather than trying to be a low-cost super fund with limited services, we have reduced fees three times in the last two years as a result of strong and ongoing growth, and active negotiations with our service providers.
This means that the annual fees and costs for a Christian Super member with $50,000 invested in our default My Ethical Super product are now are now $610 p.a. For a relatively small fund this compares favourably to the superannuation industry average of $604 p.a. *
It’s worth noting that the YourSuper tool currently over-states our fees as it’s using data from March 2021 and we’ve reduced our fees since then – you can find more information here. The YourSuper tool will be updated in the coming months when super fund data to 30 June 2021 is available and we’re expecting our fees to be corrected when that happens.
The final comment I wanted to make about fees is that we’re not standing still. As a profit-to-member fund, any surpluses we make year to year are either redeployed to improve the services we provide, or we pass them onto our members as fee savings. Our team is actively working to deliver further fee reductions in future.
We aim to provide healthy, risk-adjusted returns over the long term
Our Ethical My Super product has delivered an average annual return of 7.95% over the last 10 years, well above the target we have set and comparable to the median return of 8.28% delivered by similar superannuation options over the same timeframe.** Our returns were particularly strong in the year ending 30 June 2021, with My Ethical Super delivering a 17.41% return to members. You can find more details on our investment returns here, including the performance for our other 14 investment options.
At present, the YourSuper tool only compares MySuper products and their returns, however different MySuper products have taken different levels of investment risk to achieve these returns, and this is not shown in the tool. Generally speaking, the more investment risk a fund takes, the more likely it will have stronger returns over the long term and it’s up to the fund to determine the amount of investment risk to take based on the membership of the fund.
For example, a super fund with a lot of young members, like a fund designed for hospitality workers, might have more of their money invested in riskier investments, like the share market. This may be appropriate because this fund’s members will be investing for a longer timeframe and are likely to stay invested through the shorter-term highs and lows. As such, a fund invested this way is likely to have achieved higher returns than a fund taking less investment risk.
At Christian Super, we have a more diverse range of members and have therefore historically had a more defensive MySuper product, which means we have worked to minimise investment losses for our members and have taken less risk. This approach reflects common investment theory and was made by analysing the way our members respond to market volatility.
In responding to new regulation that puts less emphasis on protecting against investment risks, we have recently increased the amount our MySuper product invests in riskier investments. While this has resulted in an immediate improvement in our comparable performance, our longer-term historical returns are still lower than many other MySuper products due to the more defensive approach that was taken in the past.
If you have any questions or feedback about anything in this article, please don’t hesitate to contact us – we’re here to help you.
CEO of Christian Super
* This figure has been provided by SuperRatings – an organisation that independently researches and rates super funds.
** Source: SuperRatings Balanced (60-76 growth allocation) median return for the 10 years ending 30 June 2021