Best of the Best 2023: Highest Super Performer
A big call - that industrial property, the "poor cousin", would outperform the retail sector, especially during the pandemic lockdowns - paid dividends
As its name suggests, the fund was formed as a subsidiary of telecoms giant Telstra in 1990. The superannuation scheme was once exclusive to Telstra employees and their families but is now open to everyone.
This is a good thing given the fund's above-average returns. TelstraSuper took the honours after its property investment option gained an eye-watering 15% return.
Reflecting on the fund's investment strategy in the past five years, TelstraSuper's chief investment officer, Graeme Miller, says its significant allocation to industrial property - much more than in most super funds - boosted returns.
"Our large exposure to industrial property has definitely helped us," he says.
Historically, the sector was seen as the poor cousin to retail property (such as major shopping centres), but ecommerce has changed all that.
The other investment call that gave the fund a boost is that TelstraSuper had less exposure to retail properties than most super funds and, where it did invest, it chose the "highly resilient" sub-segment.
"For example, we invested in Bunnings stores. Unlike many retailers, Bunnings didn't face the same challenges as other retail stores with online competitors," says Miller.
On the contrary, the business had one of its best periods as people spent more time at home during the pandemic.
The fund also invested in neighbourhood shopping centres. As with the Bunnings example, these retail centres did well during Covid as supermarkets were still allowed to trade during the lockdowns.
Rounding out his summary of TelstraSuper's performance, Miller singles out the returns it generated for members through the property fund manager Charter Hall.
"TelstraSuper has had a very long and very successful relationship with Charter Hall. It's a partnership in the truest sense of the word as many of our returns in the last five years have come from them. They've offered tremendous value for our members."
Looking ahead, Miller says TelstraSuper has identified value in the listed property sector.
"In recent months, we've increased our exposure to listed property ... that's a tactical decision. In the fullness of time, the market pricing will adjust and get closer to the net asset value (NAV) of the fund."
Overall, the super fund has a cautious economic outlook.
"We will most likely exceed our investment objectives, but a bit of caution is warranted in the next 12 months. We remain vigilant," he says.
TelstraSuper has 12 investment options and one MySuper option (for those who don't want to make an investment choice). To benefit from the category-winning performance, a fund member would have needed to be in the "property" investment option, a sub-category under "single asset".
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