What is the Heatmap?
The Heatmap is a colour coded matrix that was developed by the Australian Prudential Regulation Authority (APRA), as a tool to help superannuation funds understand how they are performing compared to other funds in Australia.
What products are included in the Heatmap?
APRA released two Heatmaps in December 2021: an updated MySuper Product Heatmap and a new Choice Product Heatmap.
What are MySuper products and how are they different from Choice products?
MySuper is the default investment option that is offered by many (but not all) superannuation funds. In other words, if you or your employer have opened a new account with a superannuation fund and you haven’t chosen an investment option, your super is probably invested in the MySuper product of that super fund.
You can read more about MySuper products in our MySuper Explained blog.
Your super fund may also offer a number of other investment options, which are collectively known as ‘Choice’ products. As the name suggests, these are products that super fund members can actively choose to invest in, depending on factors such as their investment time horizon, tolerance for risk, etc.
What does the Heatmap measure?
The Heatmap currently measures three areas:
- The sustainability of the overall superannuation fund, based on member growth and net cash flow measures. This indicates whether a super fund will be able to provide sound outcomes for members in future, and whether they will be able to address areas of underperformance.
- Investment returns.
- Administration and total fees.
The MySuper Product Heatmap also includes the score that each product was given for the 2021 Annual Performance Test. For more information, please read our Performance Test FAQs.
Why does Christian Super have some colour in the Investment Performance section of the Heatmap?
During the past three years, all of our investment options with three or more years of performance history outperformed half of the comparable investment options offered by other super funds*, as a result of a shift in our investment strategy.
In prior years, we took a defensive approach to our investment strategy, designed to protect members’ balances and to minimise the likelihood of highly variable returns. Many other super funds had a more aggressive investment approach during this timeframe, which is one of the reasons our relative returns are lower in some of the periods measured in the current Heatmap. There was also a degree of underperformance in some areas of our investment strategy, which we have addressed.
We expect that our improved performance during the past three years will continue in future. This should result in our Heatmap colours changing over time as new years are added to the results.
Our Investment team is continually monitoring market conditions to determine the best way to deliver good returns for our members while taking an appropriate level of risk. We make investment decisions that are our in our members’ best financial interests while being good stewards of the money entrusted to us.
Why does Christian Super have some colour in the Fees section of the Heatmap?
Christian Super is a profit-to-members super fund which means our fees cover the costs of running the fund and we don’t pay profits to shareholders. We’re continuing to look for ways that we can reduce our fees while providing our members with products and services they value.
Our MySuper members with a $50,000 balance currently pay $610 p.a. in fees, which is slightly above the average fund’s fees of $604^. We’ve reduced our fees three times in the last few years, most recently on 1 July 2021.
Christian Super does not have any colour against the sustainability metrics on the Heatmap, which means the fund is growing well and cash flows are healthy. This may increase the likelihood that we can continue to identify and pass on further fee decreases to members in the future.
Should I be worried if my super fund has some coloured boxes on the Heatmap?
Here are a couple of things to consider:
- There are many factors that affect investment returns, including the amount of investment risk taken or the way that each fund classifies certain assets. Over the period that this Heatmap reviews, funds that have taken more risk have generally had higher returns as the share market has generally been strong. Conversely, funds that have been more defensively positioned due to the demographic profile of their members, have generally not performed as well during this period. Many of these funds have delivered their investment objectives, but their performance relative to other super funds is the reason that they may have coloured boxes on the Heatmap.
- The Heatmap measures fees, but doesn’t take into account the additional services, features or benefits that fund members are getting for those fees. In other words, the coloured boxes indicate the relative difference in fees rather than the relative difference in value for money.
Finally, past performance is not an indicator of future performance. Super funds closely monitor global economic conditions and market movements to try to achieve the best financial outcomes for their members.
How is the Heatmap different from tools provided by other organisations that rate superannuation funds?
According to APRA, the Heatmap is not intended to be used in isolation when making decisions about where an individual member directs their retirement savings. It is designed to enable like-for-like comparisons of outcomes being delivered by MySuper and Choice products in the key areas of investment performance and fees. It does not provide the complete picture of the outcomes that a MySuper product provides to individual members. For example, the Heatmap does not currently include measures of the value or performance of insurance offered, or the quality of other features such as member services†.
There are a number of independent super fund rating agencies that evaluate super funds on a broader range of factors, to help people find the right one based on their individual needs. SuperRatings is one such agency.
Christian Super has received SuperRatings’ Gold rating every year for over a decade. In addition, Christian Super has received SuperRatings’ Infinity Award or been Infinity Recognised every year. Our fund is a leader with regards to sustainable behaviour, and has made a genuine commitment to responsible investment principles.
If you would like more information about things you could consider when choosing a super fund, you can check out our free guide here.
If you have any further questions please contact us on 1300 360 907 Monday to Friday, 9am to 6pm AEST or email firstname.lastname@example.org
* Source: SuperRatings data to 30 September 2021. Each Christian Super investment option has been compared to peer funds with a similar percentage of growth assets. Note that this analysis excludes Ethical Index Shares, Ethical Growth Plus and Ethical Balanced Growth as these options were introduced on 1 July 2019.
^ Source: SuperRatings.