Money reveals the Best Super Fund for 2022
There has been a pent-up demand to join this year's best super fund, UniSuper, after it opened its membership to everyone in July. For 40 years it was only available to the higher education and research sector plus their families.
Since it opened up, the $100 billion fund has been busy welcoming new members. Many have switched from the 13 dud funds highlighted in the ATO's MySuper comparison tool, according to Peter Chun, the CEO of UniSuper, who took up the top job in September.
If you are weighing up your super fund and comparing it with others, it is worthwhile looking at UniSuper's many features.
"It is a thoughtful, astute and thinking organisation that takes its fiduciary role really seriously," says Alex Dunnin, executive director, research and compliance, at Rainmaker.
"Now that UniSuper is available to the public, it will become a really formidable player in the super industry."
UniSuper's size keeps the investment and administration fees low. It has access to investment opportunities that are only available to big funds with billions under management. "Scale is really important to grow the fund," says Chun.
UniSuper manages 70% of its investments and administration in-house, rather than pay for external managers. This has helped keep investment fees for the accumulation super product to 0.39%pa (plus transaction costs of 0.06%pa). The administration fee is a flat $96 a year with no percentage-of-assets fees.
UniSuper has performed strongly over the long term, with the balanced option returning 10.5%pa over the 10 years to the end of September 2021. The year to the end of September delivered a knockout 21.6% for the growth option.
UniSuper CIO John Pearce believes the next 12 months could be eventful.
"Central banks around the world will be moving away from emergency settings as the global economy bounces back. If inflation proves to be more persistent than currently forecast, interest rates might be hiked earlier than the market anticipates, and this could prove to be a strong headwind. Nevertheless, with the corporate sector in good shape, earnings growth strong and rates still low in absolute terms, the medium-term outlook for shares remains positive."
Strong focus on ESG
One of the demands of its membership, says Chun, is for the fund to be an active investor along environmental and social governance guidelines. UniSuper has $13 billion of members' money in three dedicated ESG investment options - sustainable balanced, sustainable high growth and global environmental opportunities - making it the largest ESG manager in Australia.
Across the entire portfolio, 66% of investments have Paris-aligned targets, says Pearce: "0.4% of the fund is exposed to fossil fuel extraction, with overall fossil fuel exposure down to 2.55% from 5.05% last year, effectively halving our exposure to fossil fuel."
One of UniSuper's features for its 500,000 members is its in-house financial advice, with
50 financial planners available on university campuses.
With many universities restructuring and laying off staff because of the pandemic, there has been more demand from members wanting advice and education.
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