Super's Top Performers

The latest report from SuperRatings on top performing super funds produces a few surprises and outlines some new trends. One person who was far from surprised at the results was Paula Allen, general manager of LUCRF, whose Balanced Plus plan topped the list with a return of 14.6% since the start of the financial year.
“After reviewing our investment strategy in July of last year, we employed Watson Wyatt as our asset consultant,” she says. “They recommended our current position where have an investment core and several satellite investments, which produce the fund’s outperformance.”

Established in 1978, LUCRF (Labor Union Co-operative Retirement Fund) manages $1.8 billion from more than 174,000 members. The fund began as an initiative of the Storemen and Packers Union; today it is owned by the National Union of Workers. You do not need to be a union member to join the fund.

Ironically, LUCRF is one of the few industry funds that does not focus on a particular industry. What it does do is look after its members: over the past 27 years it has returned members an average of 11.8% a year. Paula mentions both Bridgewater’s All Weather Fund and Lazard’s Global Thematic Fund as key elements of the fund’s success.

“Bridgewater’s All Weather Fund balances risk and growth in a changing economic climate and the results produced by Lazard’s Global funds speak for themselves. There is a small amount of volatility in our strategy, but we find that most of our members are interested in sticking with us over the long term, much like our approach to investment.”

There were a number of areas of growth in the past few months that helped LUCRF and others reach the top 10: the continued strength of the Australian equities market, international shares outperforming the local market for the first time in recent years and listed property trusts recording strong gains in February.

If you place a high degree of importance on the consistent performance of your super fund, you might notice that only three other funds in the list besides LUCRF featured among last year’s top 10 funds. They included the West Australian Government’s GESB, STA’s Balanced Plan and Zurich’s iSuper. It is entirely feasible that the GESB is benefiting from WA’s resources boom and you may be aware that the successful STA is set to merge with ARF next month. But the most interesting of the three is the retail fund Zurich iSuper.

Zurich’s iSuper fund has emerged with very strong results last year and in this survey only 0.3% separates it from first position. Its inclusion is interesting because this list also contains another three retail funds. Even with fees and tax, two of AMP’s and one of Plum’s retail offerings have managed to crack the top 10 list. Maybe this marks the beginning of a retail fund resurgence.