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Suncorp reveals secret recipe behind fund that beat the market

Business

Cash and global equities were the winning combination for Suncorp, which has revealed the strategy behind the best performing fund on the market in 2o20.

 

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The Suncorp multi-manager growth fund produced a return of 9.6 per cent for 2020, which it said was three times better than comparable funds.

Suncorp’s executive general manager of Wealth Shailendra Singh said when global stock markets stumbled in early 2020, Suncorp stuck to its strategy.

“This approach saw us enter the COVID-19 induced market storm with a higher allocation of cash and overweight in global equities compared to local equities, which was incredibly important because global markets actually performed a lot stronger than Australian markets,” Singh said.

The fund also benefited from lower exposure to listed property which suffered sharp declines early in the COVID-19 crisis.

The fund’s performance has again been recognised by superannuation research houses Chant West and SuperRatings as the top performing fund over the 2020 calendar year.

“We understand how difficult the past year has been for many Australians and are thrilled to have delivered such great performance for our members,”  Singh said.

“Suncorp plans to continue this momentum into 2021 and beyond, by remaining focused on delivering sustainable investment performance, providing great service, and being a trusted provider to members.”

However, over the past 10 years, the Suncorp fund does not get a look in with the best performing table dominated by industriy and not-for-profits.

UniSuper and AustralianSuper lead the rest with a 10-year return of 9 per cent a year.

Sunsuper and QSuper rank highly with 10 year returns of 8.2 per cent and 8.1 per cent, respectively.

Taking risk and return into account, Super Ratings said that QSuper’s balanced option return of 7.9 per cent over the past seven years was below some of its peers, “but it has done this with a smoother ride along the way, meaning it has delivered the best return given the level of volatility involved”.

“What the calendar year figures hide is the rollercoaster movements members experienced as the market sold off back in March 2020 and then rapidly recovered,” said SuperRatings executive director Kirby Rappell.

“As members accumulate wealth over time, market movements will have a bigger impact on their account balance in dollar terms. This is a challenge for funds and members as the average super balance rises over $100,000, with the need for education and support paramount.”

While it is important to acknowledge those funds that have outperformed over 2020, members should bear in mind that long-term performance is what really counts.

“Overall, funds have done an excellent job of managing risks through a tumultuous period,” Rappell said. “Super is a long-term game, so it’s pleasing to see long-term returns remain healthy and ahead of their CPI-plus targets.”

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