APRA super snapshot shows savings hit before vaccine boost

Data shows the super funds that best survived the pandemic and those that suffered.

Data shows the super funds that best survived the pandemic and those that suffered.

The latest snapshot of super balances has revealed the bite taken by the sharemarket rout in the first half of the year.

The data from the Australian Prudential Regulatory Authority, in the mid-year check-in, showed several funds were savaged by the rout while others actually saw strong increases in funds.

The June data showed Australian’s collective super balances closed the financial year almost $20bn more than they started 2020 despite a huge wash of early withdrawals.

The Australian Defence Force superannuation scheme was the single biggest winner, growing member benefits by 65 per cent.

They were trailed by Australian Ethical retail fund which was up 30 per cent by June largely thanks to a strong focus on defensive assets that boomed during the pandemic.

Australian Ethical super CIO David Macri said the fund was reaping the benefits of a large exposure to the healthcare sector.

“We don’t have exposure to retail in that property asset class which has helped the fund do really well,” he said.

We’re of the view that more institutional investors will start to invest in that assets class as they seek different exposures.”

Mr Macri said the year had been tough for investors, but its end of year results, not captured in the latest APRA data, were still strong.

“During COVID it was pretty tough we really had to stay focused,” he said.

“Risk premiums were bid up quite a lot but what we did is really stay focused on what the underlying value of a company would be so we formed a view early on that this would be a temporary scenario.”

Mr Macri said the super fund didn’t construct portfolios against the broader market benchmark.

“We have a very different portfolio. We’ve been managing this type of portfolio for a very long time.”

But Australian Ethical has also missed out on the buy now pay later buzz, with none of the Australian financial insurgents in the company’s portfolio.

“Afterpay confounds us. We’re lucky that Afterpay doesn’t pass an ethical criteria for us,” he said.

“It doesn’t get to the investment team for us to make that decision (to buy it). “

Cbus chief investment officer Kristian Fok, who kept falls to 1 per cent by June, said the fund had reached a strong end of 2020.

Cbus’ returns are reflecting our strong management of cash leading into the financial downturn and early release period – alongside our willingness to deploy funds back into quality businesses to support the recovery,” he said.

“This approach has been effective in delivering strong outcomes for our members.”

“Our growing internal investment capabilities enabled us to be confident in maximising the investing opportunities that the market downturn provided.”

On the down side AvSuper Growth (MySuper) account proved the single worst hit fund by June, plummeting 60 per cent.

Australia Post’s balanced fund was also savaged, down 35 per cent.

Rest Super was mauled by the pandemic and early super withdrawals, with 407,056 accounts closed, a net decline of 177,778 accounts across the fund.

Many Australian’s used the opportunity to crack open their accounts for early super withdrawal to completely drain them of funds.

APRA data shows $35.6bn has been paid out by super funds.