Premium
Asset Allocation Policy, Returns and Expenses of Superannuation Funds: Recent Evidence Based on Default Options
Author(s) -
Basu Anup,
Andrews Stephanie
Publication year - 2014
Publication title -
australian economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.308
H-Index - 29
eISSN - 1467-8462
pISSN - 0004-9018
DOI - 10.1111/1467-8462.12040
Subject(s) - asset allocation , global assets under management , business , finance , stable value fund , asset (computer security) , investment (military) , passive management , closed end fund , fund of funds , institutional investor , economics , monetary economics , market liquidity , portfolio , corporate governance , computer security , politics , computer science , political science , law
We examine the asset allocation, returns and expenses of superannuation funds whose assets are mainly invested in default investment options. A majority of these funds fail to earn returns commensurate with their asset allocation policy. It appears that much of the variation in returns between these funds is a result of engaging in significant active management of assets. Our results indicate that the returns from active management of retail funds are negatively related to expenses, whereas the relationship is positive for industry funds. We also find strong evidence of economies of scale existing in superannuation funds across different size categories .