Christian Super Investment Performance Facts

It might surprise you to learn that Christian Super outperformed half of the other super funds in Australia during the last 3 years, and our MySuper product was one of the top 3 performing growth funds in 2021 according to ChantWest research.

 

How is super fund performance measured?

‘Performance’ is another way of saying investment returns. Currently, there are many different ways to measure a super fund’s performance. A few of these measures are explained below.

Results vs objectives

A super fund will state its investment objectives in its Product Disclosure Statement, so that you know the target investment return for each investment option.

For example: the investment objective for our MySuper product is to achieve a 3% annualised return above inflation over 10 year period. For the 10 year period ending 31 October 2021, our annualised return was 8.66% vs an objective of 4.86%.

Historically, Christian Super was focused on achieving its own stated objectives and it has consistently done so. However, in recent years, the way that super funds are being measured has changed. As a result, we now measure performance in other ways, which is further explained below.

Results vs other super funds

Independent super fund rating agencies like SuperRatings and Chant West compare the performance of superannuation products. Some super funds have been trying to outperform other super funds for many years. Others, like Christian Super, have historically been focused on their own investment objectives and the unique needs of their members.

In response to a changing economic and regulatory environment, Christian Super made some important changes to its investment strategy a few years ago, including increasing the amount the MySuper product invests in riskier investments. Since that time, it has also had a greater focus on trying to outperform peer super funds.

Since making this change, all of our investment options have outperformed half of the similar options offered by other super funds. Similar options are defined as those that have a similar percentage of growth assets.

The table below benchmarks our investment option returns against the median super fund average. Please note, that it excludes three of our investment options that have less than 3 years of historical investment performance.

3 Year Performance to 31 October 2021 (Accumulation Options) i

Investment Option Christian Super’s Objective Christian Super’s Result Median Result of Similar Super Funds Christian Super’s Rank
My Ethical Super

(MySuper product)

4.9% 9.6% 9.1% 65/197
Ethical High Growth 5.4% 12.4% 11.6% 26/66
Ethical Conservative Balanced 3.8% 7.3% 6.9% 31/102
Ethical Stable 3.3% 5.2% 4.8% 42/118
Ethical Cash 0.7% 0.9% 0.8% 15/73
Results vs new APRA benchmarks

The Australian Prudential Regulation Authority (APRA) supervises institutions across banking, insurance and superannuation. In recent years, APRA has started to use new tools to measure super funds. One of these tools is called the Heatmap which was introduced in 2019. The newest tool is the annual performance test that was introduced in 2021. The first performance test applied to MySuper products only.

Both tools currently measure super funds vs the new benchmarks, based on their past performance for up to 7 years. Since they are retrospective, some super funds like Christian Super have underperformed vs these benchmarks because these measures did not exist when historic investment decisions were made.

In response to a changing economic and regulatory environment, we made some important changes to our investment strategy and have increased the amount the MySuper product invests in riskier investments, as well as making improvements in manager performance. As a result, over the past two years to 31 December 2021, we have delivered strong returns of 9.89% p.a., continuing to meet our investment return objectives, while also outperforming our estimate of the composite benchmark which is used for the performance test. This does not change the fact that My Ethical Super did not pass the test for the seven years to 30 June 2021, nor does it guarantee that it will pass in future years, but does show a clear improvement in performance which we have reason to believe will continue.

 

How will Christian Super perform in the future?

Past performance is not a reliable indicator of future performance. Based on the data we have, this is what we are anticipating.

Results vs objectives

Christian Super has historically outperformed its investment objectives. Some investment commentators are predicting that it will be difficult for any investor to achieve the type of returns that we’ve collectively seen this last decade, as the investment environment will be more challenging as we head into the next decade. Nonetheless, we will continue to focus on maximising the investment returns we achieve for our members.

Results vs other super funds

Christian Super’s investment performance has been strong in the last few years, driven by a changed investment strategy, equity manager alpha (i.e. our investment managers who are buying and selling shares are outperforming the market average), and strong returns from private equity investments made in the past four years. Although we can’t guarantee that we will continue outperforming half of the other super funds, our current trajectory looks promising.

Results vs new APRA benchmarks

Updated Heatmaps were release by APRA in December 2021. The Heatmap is presented with a colour overlay gradient showing the degree of underperformance relative to other products or selected benchmarks. Christian Super has some colour over longer time periods and less colour during the latest 3 year time period as this reflects our changed investment approach.

While our MySuper product did not meet the performance test benchmark in 2021 (which was based on the 7 year period ending 30 June 2021), strong investment returns in recent months have closed the gap considerably. This does not guarantee that My Ethical Super will meet the performance test benchmark in 2022, but it does increase the chances that it is able to do so, particularly as it shows a clear improvement in performance which we have reason to believe will continue. These statements about future performance should also be considered in light of Christian Super’s announcement about its strategic intent to find a merger partner in 2022, which you can read more about here.

 

Additional comments

Super is a long term investment so we generally encourage people to look at timeframes greater than 3 years. However, the latest 3 year period is important to consider since it most accurately reflects Christian Super’s current and future investment approach.

If you have any questions about the contents of this article, please contact us.

i Source: SuperRatings data to 31 October 2021.