In this guide
Active fund managers underperform the market
In most cases, Australian share investors would have been better off putting their money in an ASX 200 index fund than in an actively traded managed fund.
According to the Standard & Poor’s SPIVA Australia Scorecard, more than three-quarters of active fund managers in the Australian equity general category failed to keep up with the S&P/ASX 200 index last calendar year, and over the long term.
The SPIVA Scorecard measures the performance of actively managed funds relative to the relevant benchmarks over various time horizons.
The one-year underperformance rate for Australian equity general funds in 2023 was 77%, which was the second highest in the group’s records which go back to 2009. The 15-year underperformance rate was 85%.
The underperformance rate in the international equity general category was 81% of active funds performing worse than the S&P Developed Ex-Australia LargeMidCap’s total return of 24.1%. Over the 10- and 15-year horizons, around 94% of funds underperformed.
Australian bond fund managers fared much better last year with just 26% of funds lagging the index. Over the longer term, 56% and 46% underperformed over three- and five-year periods, respectively.
Australians from non-English speaking backgrounds face super savings gap
Australians from non-English speaking backgrounds (NESB) are facing a retirement savings gap when compared with the overall population, according to new research from the Association of Superannuation Funds Australia (ASFA).
While overall median balances for NESB Australians have lifted, from $35,000 to $100,000 for males and $19,000 to $50,000 for females in the eight years to 2022, that is still lower than the equivalent general population, where median balances were $250,000 for males and $170,000 for females.
“People from non-English speaking backgrounds make up 16% of total super account holders in Australia and, unfortunately, their super balances are lower across every age group when compared with the general population,” ASFA chief executive officer Mary Delahunty said.
“The upcoming Federal Budget presents a clear opportunity to address the retirement savings gap for people from non-English speaking backgrounds. ASFA is calling for an increase in the Low-Income Superannuation Tax Offset (LISTO), which would boost the low super balances of more than 200,000 people from non-English speaking backgrounds,” Ms Delahunty added.
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