Superannuation: Why this fundie says benchmark hugging hurts super funds

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Superannuation: Why this fundie says benchmark hugging hurts super funds
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London-based Stafford Capital boss Angus Whiteley says the superannuation sector’s performance test regime risks short-term thinking.

Already a subscriber?The comments are almost inevitable. When a visiting fund manager or markets big dog hits Australian shores – whether it’s BlackRock’s Larry Fink, Blackstone’s Jon Gray or JPMorgan’s Jamie Dimon – the conversation will eventually turn to how good the Australian superannuation system is.

which essentially names and shames any funds that fail to keep up with an industry benchmark, is encouraging a short-term focus in an industry that is inherently designed to think very long term. European investors, where regulation has incentivised a shift to low-carbon investors, are leading the way. But with US investors caught between the Inflation Reduction Act and a backlash against “woke capital”, Australia’s super sector could seize this opportunity, in Whitely’s view.

Is Whitely talking his own book? No doubt. But that doesn’t make his criticism any less valid, especially as the sector itself reviews the Your Super, Your Future rules.There is clearly a difficult balance to be struck between not tolerating laggard funds and using super’s long-time horizon to take appropriate risk-adjusted returns.

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