super review magazine - march 2010

T H E L E A D I N G I N D E P E N D E N T J O U R N A L F O R T H E S U P E R A N N U A T I O N A N D I N S T I T U T I O N A L F U N D S M A N A G E M E N T I N D U S T R Y

12 CMSF PREVIEWRemembering the lessons of thepast to prepare for the future

For the latest news, visit superreview.com.au

14 FUND PERFORMANCERetail master trusts enter greener pastures

18 EQUITIES OUTLOOKFund managers refuse to get carried away

Pressure is mounting on theFederal Government viathe Cooper Review to have

self-managed superannuationfunds (SMSFs) moved underthe regulatory oversight of theAustralian Prudential Regula-tion Authority.

While the SuperannuationProfessionals’ Association ofAustralia, which provides spe-cific industry coverage of SMSFs,is highly resistant to having thesector removed from the regu-latory jurisdiction of the Aus-tralian Taxation Office (ATO),a majority of submissions filedwith the Cooper Review supportcommon regulatory oversight ofsuperannuation, includingSMSFs.

Support for common regula-tory oversight is strongest amongindustry fund submissions, withthe Investment and FinancialServices Association (IFSA)and planning groups supportingcontinued regulation of SMSFsby the ATO.

However, even with respect toIFSA and the planning groups,there is a strong push for thetrustees of SMSFs to be held tohigher standards.

Even Commonwealth BankWealth Management’s submis-sion to the review has arguedthat notwithstanding further re-sourcing of the ATO to better su-pervise SMSFs, “the ATO is not

capable of monitoring the ma-jority of SMSFs”.

It said that as a result, [theATO] relied heavily on ap-proved auditors to manageSMSF compliance.

“It is therefore critical for ap-proved auditors to possess thenecessary knowledge and skillsrequired to undertake their du-ties, especially in relation to thespecific Superannuation Indus-try (Supervision) Act (SIS) reg-ulatory requirements,” it said.

The submission said that theanecdotal evidence, and state-ments made by the ATO, sug-gested this was not always thecase.

While IFSA has not support-ed removing SMSFs from theATO’s regulatory supervision,it has argued that there shouldbe stronger oversight by the reg-ulators of SMSF serviceproviders.

PriceWaterhouseCoopers(PWC) reflected the broad in-dustry view when it claimed thecurrent system of shared regu-lation by APRA and the ATO, to-gether with all superannuationfunds being subject to the samesupervisory legislation, “resultsin inefficiencies and some con-fusion”.

It said the current SIS legis-lation is often difficult to inter-pret in relation to SMSFs andit is sometimes unclear whether

certain provisions apply toSMSFs or are meant to applyonly to larger funds.

“In our view, in the absence ofa separate Act governing the su-pervisory rules for SMSFs, someredrafting of the SIS legislation,or separate guidance, would pro-vide greater clarity on whichrules apply to SMSFs and whichdo not,” the PWC submissionsaid. “It is also our view thatthere should be one regulatoryteam devoted to SMSFs. We be-lieve that the ATO could moreeffectively regulate the SMSFsector if the supervisory legisla-tion was better distinguished be-tween the rules applying toSMSFs and those applying toother funds.

“Overall, in our experience,the regulation of SMSFs by theATO has been largely effective,but in some instances the ATOhas been unable or unwillingto provide guidance to trusteeson the operation of the rules toSMSFs, or to exercise discretionon certain supervisory matterswithout also considering APRA’sposition.” SR

The Government will find itself under

pressure to bring SMSFs under APRA

jurisdiction in circumstances where

even those servicing the sector believe

SMSFs require closer and more

consistent supervision.

Bringing SMSFs into the fold

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COMPANY INDEX 2 NEWS 3 EDITORIAL 10 CMSF PREVIEW 12 EQUITIES OUTLOOK 18 APPOINTMENTS 23 EVENTS 23

March 2010 Volume 24 - Issue 2

6 COOPER REVIEWIndustry bands together to begin fight back

In some instances the ATO has been

unable or unwilling toprovide guidance to

trustees on theoperation of the rules

to SMSFs.

2 PAGE TWO www.superreview.com.au

SUPERREVIEW * MARCH 2010

Wednesday 7 April 2010, Roseville Golf Club

The Super Review Charity Golf Tournament is not just about getting out of the office and onto the green stuff to talk business...

It’s also about getting together with your industry peers to have some fun and, at the same time, raise some much needed money for kids in need.

In addition to a day of fun and fellowship with your clients, there will be the opportunity to win team and individual prizes for feats such as nearest to the pin, longest drive and, of course, the Editor’s Bradman Award. In fact, the Super Review Charity Golf Tournament represents good value for both serious (handicap) golfers and social players. Everyone has an opportunity to WIN!

Ultimately, the success of the day will be owed to the support of our sponsors and the money raised for The Inspire Foundation.

We will go out of our way to ensure your support is recognised.

If you have any queries please contact Heather Lawson on (02) 9422 2791or email [email protected]

COMPANY INDEXAGEST ................................................................................................................................3AMP ................................................................................................................................3, 8Asset Super ........................................................................................................................3Association of Superannuation Funds of Australia ................................................................6, 8AustralianSuper ............................................................................................................3, 6, 9Australian Custodial Services Association ..............................................................................6Australian Institute of Superannuation Trustees ..................................................................4, 6Australian Prudential Regulation Authority ............................................................................9Australian Securities and Investments Commission..................................................................9Australian Tax Office ............................................................................................................9AXA Asia Pacific ..................................................................................................................8Bank of New York ................................................................................................................3CareSuper ..........................................................................................................................3

Cbus ..................................................................................................................................3Chant West ......................................................................................................................3, 8Colonial First State ..............................................................................................................3Corporate Superannuation Association ..................................................................................6Elders Limited......................................................................................................................9Financial Planning Association ..............................................................................................6First State Super..................................................................................................................3HIH Royal Commission ..........................................................................................................4Hillross ..............................................................................................................................8Hostplus..............................................................................................................................3Investment and Financial Services Association........................................................................6MasterSuper ........................................................................................................................9Mercer ................................................................................................................................3

Newton Investment Management ..........................................................................................3NGS Super ..........................................................................................................................3OneSteel..............................................................................................................................4Plum ..................................................................................................................................3REST ..............................................................................................................................3, 6Russell ............................................................................................................................3, 4Self Managed Super Fund Professionals’ Association of Australia ..............................................9Senate Standing Committee on Economics..............................................................................9Sunsuper ............................................................................................................................3Towers Watson ................................................................................................................8, 9UniSuper ............................................................................................................................3Victorian Funds Management Corporation ..............................................................................4

Industry funds provide best value proposition

MARCH 2010 * SUPERREVIEW

MASTER trusts may have outperformed other sectors ofthe superannuation industrylast year, but the latestChant West data reveals thatnot-for-profits have contin-ued to dominate the list oftop-rated funds.

Chant West principal War-ren Chant acknowledgedthat retail master trusts out-performed industry funds forthe first time in four years,during 2009. However, hesaid that while investmentwas very important and ac-counted for 40 per cent ofhis company’s overallmethodology, Chant West didnot rate funds higher or

lower on the basis of just oneyear’s performance.

He said the reason not-for-profit funds achievedhigher ratings was to befound in their overall valueproposition.

“The better industry fundshave relatively low adminis-tration fees, excellent investment processes, low-cost insurance and an in-creasing range of memberservices including some ex-cellent member education,” Chant said.

The Chant West analysislisted the top 10 personalsuper products, in alphabet-ical order, as being: AGEST,

AustralianSuper, CareSu-per, Colonial First StateFirstChoice Wholesale, FirstState Super, Hostplus, NGSSuper, REST, Sunsuper andUniSuper.

The Chant West data re-vealed that the top funds formedium-sized corporate superplans were AMP Signature,AustralianSuper Corporate,Mercer, Plum, Russell andSunsuper Corporate.

Looking purely at invest-ments, the top 10 funds wereAustralianSuper, CareSuper,Cbus, First State Super,Hostplus, Mercer, NGSSuper, REST, Sunsuper andUnisuper. SR

Merger talkmoot on Asset SuperASSET Super has confirmed thatit has been in discussions with anumber of superannuation fundsaround the question of a merger,but its chief executive, John Paul,has denied that an announcementis imminent.

Suggestions have been circulat-ing that Asset Super has been indiscussions with both NSW’s FirstState Super and Queensland’sSun Super, but Paul has declinedto confirm or deny the status oftalks with either fund.

“We are aware of reports that weare in discussion with various par-ties,” he said. “But any discussionswe’ve had or are having are subject to confidentiality.”

Paul added that the investmentperformance outcomes thatprompted suggestions of the needfor a merger on the part of AssetSuper were no longer a centralissue given recent improvementsin returns.

He said while some discussions hadtaken place, it would be “presumptu-ous in the extreme” to suggest any out-comes had been reach. SR

In search of the right exit strategyFINDING an appropriate exit strategy from fiscal stim-ulus policies represents a key challenge for governmentsand authorities around the world this year, according tothe head of Bank of New York Mellon’s fixed income spe-cialist company, Newton Investment Management, Paul Brain.

Brain has used his latest analysis to suggest that 2010 willbe the year of exits and that just like the Greeks at Ther-mopylae in 480 BC, the emphasis for governments will be oncovering their exits.

He said that while the enormous fiscal and monetarypolicy efforts of 2009 appeared to have been sufficient

to turn the world economy around, the bill for previousexcesses still needed to be paid.

“The tricky balancing act for authorities in 2010 will beto pay for those excesses while avoiding a capital short-age similar to that which occurred in 1994,” Brain said.“We have argued repeatedly that, saddled with debt, theWestern Governments cannot contemplate anything buta fiscal exit.”

Referring directly to the current sovereign debt prob-lem in Greece, Brain said there were two difficulties witha fiscal exit strategy: when to apply the pain and en-suring that markets trust the strategy. SR

Russell extends service offeringRUSSELL Investments has added 20new specialists as part of a range ofexpanded services in response to in-creased client demand and growth incore service lines.

“The changes mark an importantnew phase for Russell’s business in thelocal market,” said the managing di-rector for Russell Investments in Aus-tralia and New Zealand, Chris Corneil.

“Against the backdrop of a changedglobal financial services and invest-ing landscape, our growing team ofspecialists is focused on developinginnovative solutions, revisiting andredefining old models, seeking new

and exciting investment opportuni-ties and finding better ways to servecustomers,” he said.

Key appointments include directorof actuarial and benefits consultingSteve Schubert as managing director,superannuation, replacing LindaElkins; and Geoff Peck, Russell’sdirector of superannuation, who hasbeen appointed managing director,government and institutions.

Russell’s core services expansionincludes six new positions that will beadded to investment consulting, theaddition of an exchange traded fundsteam and the addition of five newretail roles in response to increasedself-managed superannuation funddemand. SR

www.superreview.com.au NEWS 3

Warren Chant

Chris Corneil


PARENT companies of investmentconglomerates and financial corpo-rations should create smaller groupstructures and be made directly re-sponsible for their subsidiaries’ ac-tions, according to Justice Owen, thecommissioner of the HIH Royal Com-mission. Speaking at a luncheon ofthe Australian Institute of Super-annuation Trustees, Justice Owensuggested that large group companystructures with greater numbers ofsubsidiary companies had contributedto corporate collapses in the past.

“What did all these [failed corpo-rate companies] have in common?The number of subsidiaries they had.Was it necessary to have group struc-tures as large as that, and did the factthat there were so many companiesin some of those groups contribute totheir collapse?” he asked.

The way those large group structureshad been used in the past decade wasinappropriate, he said.

Responding to a question from SuperReview, Justice Owen suggested that theparent company in a group structure be

made directly responsible for the obli-gations of its subsidiary companies.

“That does have its problems ... but it’sone of the subjects that I think we needto debate,” he said.

Justice Owen also said that the larg-er the group company structure was, theeasier it became (innocently or delib-erately) to hide the true financial posi-tion of a conglomerate.

It was also too easy for a large con-glomerate to simply cast aside a trou-bled subsidiary, or for a company tophoenix into a new corporation with

the troublesome company remainingpart of the conglomerate, JusticeOwen said.

A group structure also caused a “re-curring nightmare” of directors makingdecisions in the interests of the groupwhen they should have been focusing onthe interests of the group member, andthat created problems, Justice Owen said.

‘Outside’ directors also made bad in-vestment and lending decisions based ongroup strength, when the focus of theirattention should be on the individualcompanies’ situations, he added.SR

Ratingsagenciescriticised RATINGS agencies are likely to emergeas one of the bigger losers from the glob-al financial crisis because of some of theratings they handed particular products,according to the chief investment offi-cer of Victorian Funds ManagementCorporation (VFMC), Justin Pascoe.

Addressing an Asset AllocationSummit in Sydney, Pascoe signalledthat the performance of the ratingsagencies in the lead-up to the global fi-nancial crisis had persuaded the VFMCto change its approach and to placegreater reliance on other methods.

He said the global financial crisishad served to highlight the mannerin which ratings agencies were paidand the conflict issues that thenarose, particularly where it couldbe suggested that they had receivedpayments for particular ratings.

“I do not think ratings agencies willget their reputations back very quickly,”Pascoe said. SR

Mercer defends super tax concessionsMERCER has released newresearch that it claims dis-proves suggestions that su-perannuation tax concessionshave led to high-income earn-ers receiving the lion’s shareof government support for re-tirement income.

Instead, Mercer said its re-search suggested that, takinginto account both the supertax concessions and the agedpension, total governmentsupport for retirement incomeis remarkably equal across avariety of income levels.

Commenting on the re-search, Mercer partner for

retirement, risk and financeDavid Knox said it cast newlight on the debate aroundthe cost and equity of super-annuation tax concessions.

“Much of the criticism oftax concessions fails to takeinto account the direct linkbetween the level of retire-ment and savings and relianceon the age pension,” he said.“When considering the costof superannuation tax con-cessions, looking at the taxconcessions only tells halfthe story.”

Knox said that while the re-search confirmed that those

with higher incomes or re-ceiving higher salary increas-es did receive a higher levelof superannuation tax con-cessions, they were alsolikely to receive a lowerlevel of government-fundedaged pension.

“What is interesting is theoverall cost to the Govern-ment is roughly the same re-gardless of whether the fund-ing is weighted towards taxconcessions for a higher in-come earner or providing theage pension to a person whoneeds to top up their incomein retirement,” he said. SR

Russell launches new fundsRUSSELL Investment is urging clientsto consider increasing their exposure toliquid alternatives.

The company said that with the aim ofenhancing investor diversification andprotection against inflation, it had ro-tated its flagship multi-asset portfolio,Russell Pooled Superannuation Trust –Balanced Opportunities Unit, into threenew alternative asset sector funds.

It said the rotation had increasedbalanced opportunities’ alternativestrategies exposure by 7 per cent in thepast three months.

Commenting on the move, Russell

portfolio manager Andrew Sneddonsaid the company had taken a “rightstrategy, right time” approach toalternatives.

The company said that to allow in-vestors to implement alternative strate-gies it had launched three new sectorfunds with an alternatives focus: theRussell Commodities Fund, the RussellGlobal Listed Infrastructure Fund andthe Global Strategic Yield Fund.

Russell Investments has also consol-idated its relationship with OneSteel viaa corporate superannuation outsourcingmandate.

Russell announced that the OneSteelfund would tuck into the Russell SuperSolution Master Trust.

The mandate represented the nextstep in an ongoing relationship that hadseen Russell providing trusteeship, ad-ministration and investment manage-ment services.

Russell had been working with On-eSteel since 2001 and described the man-date as representing one of the largestmaster truss mandates in Australia.

The OneSteel fund has around 5,000members and $1.1 billion in funds undermanagement. SR

HIH judge tough on conglomerates

4 NEWS www.superreview.com.au

David Knox

Justin Pascoe


THE Cooper Review into superannu-ation is now confronted by a phalanxof industry organisations express-ing concern about its proposedchanges to the ‘choice architecture’.

What is more, this united front ofopposition now ranges from the in-dustry funds movement to financialplanners.

The Australian Institute of Su-perannuation Trustees, the Associ-ation of Superannuation Funds ofAustralia, the Corporate Superan-nuation Association and the Invest-ment and Financial Services Asso-ciation recently issued a joint statementthat was critical of the Cooper approach;

and, the Financial Planning Associ-ation (FPA) has expressed similarconcerns.

The combined statement from thefour superannuation industry bodiescalled on the Cooper Review panel toreconsider its choice architecture rec-ommendations on the basis that theremit of the review panel had beento “renovate the super house” – notto bulldoze it.

For her part, chief executive of theFPA Jo-Anne Bloch said the Aus-tralian superannuation system wasworld-class and only needed subtlepolicy changes – not a completelynew product structure.

She said that instead of focusing onsuch radical concepts, the review panel“should focus on obvious impedimentssuch as different governance and reg-ulatory systems and the unlevel play-ing field between superannuation sec-tors when it comes to financial advice,disclosure and choice”.

Bloch said the FPA had also arguedin its submission in support of the sig-nificance of self-managed superannu-ation funds (SMSFs) in the provisionof retirement planning for Australians.

The FPA claimed that further in-tervention in the SMSF environmentwould threaten the success of SMSFsas a superannuation option. SR

Custodiansflag furtherconsolidationTHE Australian Custodial ServicesAssociation (ACSA) is flagging fur-ther consolidation across the fi-nancial services industry.

The chairman of ACSA, BryanGray, claimed the global financialcrisis had established a new worldorder for Australia’s investment andfinancial services community, driv-ing further consolidation as well asa raft of new regulation.

“A key change we are noticing isthe convergence of institutionalservices across the traditional bankand custody divide,” he said. “Majorglobal bank providers are bringingtheir own operations together to pro-vide traditional treasury, primebroking and cash clearing servicesalongside the spectrum of custodyand securities services that havebeen developed to support Aus-tralia’s superannuation and institu-tional investment community.”

Gray claimed this would creategreater efficiency for larger insti-tutional clients as well as benefitcustodians, which could integratepreviously segregated businesses tocreate a seamless solution forclients. SR

THE financial crisis is likelyto drive small super funds tomerge in an attempt toachieve lower costs and bet-ter performance for theirmembers, but such mergerswill not achieve the scale ben-efits super funds are lookingfor, according to the Aus-tralian Super general man-ager, growth and new oppor-tunities, Paul Schroder.

“My sense is that there area number of small fundsthinking of merging with

[other] small funds, [but]two small funds joining to-gether just makes anothersmall fund,” Schroder said.

“You go through the traumaof joining with another smallfund [just] to remain a smallfund,” he said.

While there were instancesof two small funds joining to-gether, eventually they wouldhave to make another moveto achieve economies of scale,Schroder said.

He added that we were

coming to a time whensmall and medium fundswould be challenged by the“pure pressure” of costs andperformance.

Schroeder warned thatsuper funds could no longerafford to focus on a singleindustry.

“If you are a small fund thatis very dependent on one in-dustry, then if the industrysuffers difficulty your mem-bership growth and contri-bution levels are going to be

under pressure,” he said.The financial crisis had ex-

posed a lack of communica-tion skills in the smallerfunds, which were unable toreassure their members aboutthe strength of the super fund,according to Schroder.

“We all had the bad event,but the larger funds are bet-ter resourced to deal with it,”he said.

Australian Super recentlywon a $650 million tender forMasterSuper. SR

REST raising young members’ awarenessRETAIL industry fund REST haslaunched a new education push onthe back of the fund’s own analysisthat revealed that as many as300,000 of its members have not evenprovided their tax file number.

The fund announced that theproblem demographic was 18 to 30year olds, with many of the samepeople also not taking advantageof the potential benefits whichflowed from consolidating their su-perannuation accounts or makingvoluntary contributions.

Commenting on the new educationpush, REST chief executive DamianHill said that if people engaged in theirsuperannuation at a younger age theywould be in a much better positionwhen it came to retirement.

“By getting organised now, theycan boost their eventual super pay-out by many thousands of dollars,”he said. “All they need to do is takea few minutes to sort out their superin three easy steps – provide theirTFN, make extra contributions andconsolidate their super.” SR

Cooper: the industry fights back6 NEWS www.superreview.com.au

Jo-Anne Bloch

Damian Hill

Pressure builds for fund mergers

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AMP has declared its continuing in-terest in acquiring AXA Asia Pacificat the same time as reporting a 27 percent increase in net profit attributa-ble to shareholders of 27 per cent to$739 million.

The company pointed out that under-lying profit stood at $772 million and wasdown 5 per cent on the previous year.

AMP chief executive Craig Dunn said:“AXA remains strategically attractiveto us. We are continuing to consider ourposition and will do what is in the bestinterests of shareholders.”

His comments came at the sametime as he acknowledged that industry

consolidation was continuing to gatherpace and that AMP expected the com-petitive landscape to continue to shift.

The AMP chief executive said whilemarket volatility still existed and a fullrecovery would take some time, the com-pany believed that over the medium tolong-term the fundamentals for thewealth management sector remainedvery attractive.

Looking at the company’s divisional re-sults, Dunn said AMP Financial Serviceshad delivered a good result with oper-ating earnings up 2 per cent to $648 mil-lion on the back of strong banking andinsurance results.

He said total net cash flows had risen17 per cent to $1.7 billion and that theresilient net flows had reflected thestrength of mandated superannuationand increased flows from the acquisitionof Rabo Financial Advisers.

In contemporary wealth management,Dunn said operating earnings had risen5 per cent to $278 million as a result of astrong performance from AMP Bank.

He also pointed to tighter cost con-trols across the division, which hadbeen achieved at the same time asaligned planner practices AMP Fi-nancial Planning and Hillross hadgrown by 26 planners to total 811. SR

Govt to streamlinedisclosureTHE Minister for Financial Services, Superannu-ation and Corporate Law, Chris Bowen, has an-nounced the Government is streamlining long-termsuperannuation disclosure requirements.

The move would enable members to receive moreuseful and accessible information and would ex-clude exit statements, allow the industry to use in-serts to provide five-year performance informationuntil June 30, 2011, exempt traditional funds andallow approved deposit funds and pooled super-annuation trusts to provide annual reports online.

Pauline Vamos, the Association of Superannu-ation Fund of Australia’s(ASFA’s) chief executive,welcomed the Government’s announcement as aclear victory for the industry.

“This is a clear indication that this Govern-ment is willing to listen and is looking for pragmaticoutcomes that provide a benefit to members with-out placing unnecessary costs on the industry. Thenext step is to provide income benefit projec-tions for fund members in their annual statements.The industry wants to find a way to show peoplewhat they will get in retirement both with and with-out the age pension so that they can benchmarkthemselves against the Westpac-ASFA retire-ment standard,” she said. SR

Modest growth in equities predictedFUND managers are predicting modest global eco-nomic growth and higher equity returns in 2010 butare less positive about bond and credit markets, ac-cording to a survey conducted by global professionalservices firm Towers Watson.

Managers anticipated overall returns on globalequities of 10 per cent, up from 6.7 per cent in 2009,with the high expectations driven by emerging mar-kets. Expectations of returns in non-Japanese Asianmarkets were 14.5 per cent, compared to around 8.5to 9 per cent for most Western markets.

“The overall picture we get from this influentialgroup is one of recovery, with established Western mar-kets lagging the emerging markets on most measures,”said the global head of investment at Towers Wat-son, Carl Hess.

There was “an increase in the expected propensi-ty of investors to take risk in 2010 and managers’ com-mensurate bullishness about risky assets”, as well asa view that government policies would be conduciveto market stabilisation and economic growth, he added.

Responses revealed significant uncertainty aboutyields on both short and long-term corporate and gov-ernment securities, while credit markets were likelyto remain unpredictable for the foreseeable future.

Real gross domestic product growth was expectedto be around 1.5 to 3 per cent in Western markets, andup to 7 per cent in parts of Asia. Unemployment wasthought to have peaked but was expected to remainhigh by historic standards, and all marketplaces werethought to have reached the bottom of the housingmarket, with the exception of the US. SR

Equities pause sees industry funds regain leadSUPERANNUATION funds lostground in January after finishing 2009on a high, although funds across theboard have still recorded stronggrowth for the financial year to date,according to Chant West data.

Growth funds (those with a 61 to80 per cent allocation to growth as-sets), which are the default optionfor most members, have grown 10.4per cent this financial year despiteshrinking 2.2 per cent in January.

The slow start to 2010 was due toa 6.2 per cent contraction in the Aus-tralian share market for the month,while international shares also re-treated, according to Chant West.

“The markets were probably duefor a breather after running up sostrongly towards the end of 2009,” saidChant West principal Warren Chant.

“We had a strong Christmas rally,which was unlikely to be sustainedinto the New Year,” he said.

These results highlighted the valueof diversification, he added. Growthassets in the funds weren’t limited tolisted shares and property, with manyhaving a diverse mix including un-listed infrastructure, opportunisticproperty and private equity – “so theyare able to cushion the blow whenshare markets fall”, Chant said.

These assets feature more heav-ily in industry funds than mastertrusts, and it was the stronger per-formance of these assets that ledto industry funds outperformingmaster trusts in January for just thesecond time in the past 11 months,Chant said. SR

Profitable AMP still keen on AXA

8 NEWS www.superreview.com.au

Craig Dunn

Chris Bowen

Angst at ATO approach to SMSFs


THE Self-Managed SuperFund Professionals’ Associ-ation of Australia (SPAA)has criticised the AustralianTaxation Office (ATO) forlisting new self-managedsuper funds (SMSFs) undera new category of ‘Registered- status not determined’ in theSuper Fund Look Up system,claiming it created the im-pression that new SMSFs werenot compliant.

The ATO created the cate-gory in January this year, and

explained it would indicatethey were newly-formed fundsthat have not yet lodged theirfirst annual return.

But in a media briefing atthe SPAA conference in Mel-bourne, SPAA chairmanSharyn Long said the ATO’sexplanatory notes of the newcategory suggested that thesefunds would not be compliantwith regulation until theylodged their first return.

“The first thing most peoplewho set up a SMSF do is apply

to roll over their existing su-perannuation entitlementsout of [a] large fund – andlarge funds rely on SuperFund Look Up to determine ifthe [SMSF] is a compliantfund,” she said.

Larger super funds couldrefuse to roll over fundsinto a new SMSF, sayingthat it wasn’t compliantwith regulation, Long said.

The notes suggesting a fundmight not yet be compliantwere also inconsistent with

current regulation, Long said. When a new SMSF is

formed, it is automatically acompliant fund unless itbreaches a provision of the Su-perannuation Industry Su-pervision Act, she said.

“We have absolutely no con-cern with the fact that process-es are meant to be quite rig-orous. It’s just that some of theprocesses that have been askedfor don’t make a lot of sense,”said SPAA chief executive Andrea Slattery. SR

APRA not ready to relaxTHE Australian Prudential Regulation Au-thority (APRA) will not be dialling down itssupervisory oversight in a belief that the worstof the global financial crisis is over.

That is the message from the chairman ofAPRA, John Laker, who has told the Sen-ate Standing Committee on Economics thatwhile Australian financial institutions weath-ered the crisis better than most, it was not atime for “hats in the air”.

“Certainly, APRA is not ready to dial downthe level of its supervisory intensity,” Laker said.

Discussing global regulatory reforms,Laker made clear that APRA was consciousof ensuring that changes within the Aus-tralian environment did not unduly ham-string the local industry.

“While the need for global reform is un-questioned, prudential regulators do notwish to introduce measures that impose anoverall burden greater than the sum of theparts,” he said. “That would thwart globalrecovery efforts or would have unintend-ed consequences.”

The APRA chairman said the regulatorwas participating actively in a study of theimpact of the reform proposals and wouldbe feeding in relevant information from anumber of Australian approved deposit-tak-ing institutions “to ensure that we under-stand fully the implications of the reformproposals for Australia”. SR

AUSTRALIANSUPER has re-inforced its position in theAustralian market with itscorporate superannuation di-vision picking up the mandatefor the former Elders Limit-ed fund MasterSuper.

The mandate was con-firmed by the executive officer

of MasterSuper, Mark Slad-den, who said the decisionhad followed an extensivetendering process.

He said the decision meantthe fund would be able to offerits members the benefits thata fund the size of Australian-Super could bring.

MasterSuper boasts around12,500 members and $650 mil-lion in funds under adminis-tration.

The mandate would bringAustralianSuper’s corporatebusiness to 45,000 membersand $1.9 billion in funds underadministration. SR

www.superreview.com.au NEWS 9

Sharyn Long

John Laker

Make forecasts mandatoryLEADING consultancy TowersWatson has suggested the Aus-tralian Securities and Invest-ments Commission (ASIC) makethe provision of retirement in-come projections mandatoryfrom 2012.

In an analysis published in Feb-ruary, the company noted ASIC’sproposal for a voluntary projectionregime but argued that it should beboth mandatory and inclusive ofage pension projections.

It pointed out that the age pen-sion was the so-called ‘first pil-lar’ of the Australian retirement in-come system and that if it wereexcluded from forecasts, fundmembers would not only be denied

important information but mightfocus too keenly on voluntarycontributions.

“While we recognise that in-cluding the age pension increas-es the complexity of retirementprojections, it should be possi-ble for the Australian GovernmentActuary to establish a table whichshows each level of superannua-tion retirement income and thecorresponding combined income,including the age pension,” theTowers Watson analysis said.

It said this would substan-tially reduce both the workloadof providers and the risk of errorin providers determining thecombined amount. SR

Global equities window of opportunity closesTHE best opportunities to reap returns from undervalued global equi-ties have passed, according to a new analysis released by Mercer.

The head of Mercer’s Dynamic Asset Allocation team in Australia,David Stuart, said the company had brought its global equity ratingback to ‘fair value’ from ‘undervalued’ as the growth in global equitymarkets slowed over the past quarter.

“We remain optimistic that corporate earnings will continue to recoverbut the markets have now built in a reasonable amount of expectationaround good news in future earnings, and this has squeezed out thepotential for above average returns,” he said.

Stuart said Mercer also believed equity markets were in for a bumpyride with many risks still facing global economies, meaning the caseto be overweight global equities was no longer as strong. SR

AustralianSuper picks up MasterSuper mandate

Alien concepts

The chairman of the Coop-er Review into Superan-nuation, Jeremy Cooper,

made an important promiseto the recent annual confer-ence of a specialist self-man-aged superannuation funds(SMSFs) body, the Superan-nuation Professionals’ Asso-ciation of Australia (SPAA).

Cooper promised that hispanel’s deliberations wouldnot result in the introductionof a policy “cane toad” to theSMSF sector. He did so in thecontext of how the cane toadwas introduced to theQueensland sugar cane in-dustry in the 1800s and theserious unintended conse-quences that have resulted.

Cooper should give a sim-ilar undertaking to the broad-er superannuation industry

in circumstances where someof the proposals being can-vassed by his review panel areclearly trying to remake thewheel.

Acts of unity are rare acrossthe various organisations thatseek to represent the super-annuation industry. ThusCooper should accept the sig-nificance of four of those or-ganisations putting aside theirrivalry to present a unitedfront to his panel’s proposalsregarding the architecture ofthe industry.

That united front took theform of a joint submissionsigned off by the Associationof Superannuation Funds ofAustralia (ASFA), the Aus-tralian Institute of Superan-nuation Trustees (AIST), theInvestment and FinancialServices Association and theCorporate Super Association.In short, every element of theindustry was represented,from industry and corporatefunds through to retail master trusts.

The joint submissionwarned that instead of just

“renovating the house” withrespect to superannuation, asoriginally envisaged by theformer Minister for FinancialServices, Superannuationand Corporate Law, SenatorNick Sherry, the review panelappears inclined towards de-molishing the house andstarting again.

The joint submission thenwent on to defend the exist-ing architecture and themanner in which it met theneeds of both those memberswho were fully engaged andthose who can be deemeddisengaged.

Some commentators sug-gest that the joint submis-sion compiled by the indus-try organisations representsan overreaction because theCooper Review panel hassimply been seeking to pro-voke debate rather thanbeing doctrinaire.

The problem with thisanalysis is the unconven-tional approach Cooper hasadopted to the entire reviewprocess and some of thestatements he has made.

Those statements have ap-peared to say more about hisown views on the future of theindustry than they do about thebroad tenor of the submissionshis panel has received.

Indeed, any reading of thesubmissions received by theCooper panel over the firsttwo phases of the review sug-gests that virtually no onewants to throw the baby outwith the bathwater. Quitesimply, there is absolutely noevidence of a call for radi-cal change.

While there have been callsfor changes and improve-ments, they have suggestedthat these changes and im-provements be at the marginsof the existing regime.

Perhaps just as important-ly, beyond obviously political-ly-motivated agendas, therehave been no calls for radicalchanges to the existing SMSFregime and certainly no broadacceptance that such fundsshould be pushed under theregulatory umbrella of the Australian Prudential Regulation Authority.

The Rudd Government hasnot made a good start to 2010in terms of maintaining pos-itive political perceptions andit needs to be careful that thedebate being generatedaround the Cooper Reviewand, indeed, the still secretHenry Review do not serve to

undermine confidence in su-perannuation as an attractiveinvestment option.

There is plenty of evidenceto suggest that even the smallchanges announced to su-perannuation arrangementsin the last Federal Budget un-dermined confidence. It istherefore not a leap to sug-gest that the canvassing ofradical change resulting fromthe Cooper recommendationswill have a similarly adverseimpact.

As was succinctly pointedout by the four industry or-ganisations when filing theirjoint submission to the Coop-er Review, the original Gov-ernment objective was to‘renovate’ the Australian su-perannuation system ratherthan to initiate a radical re-design or rebuild.

Perhaps, on that basis, it istime for the Cooper Review tostep back within the bounds ofconvention and, by doing so,develop a set of recommen-dations that reflect the viewsof all the major stakeholders.

If Cooper does not want tointroduce a policy cane toadinto the Australian superan-nuation industry he shouldclosely examine the history ofthe cane toad in Australiaand accept that what appearsto work in one environmentis not necessarily suited toanother. SR

The chairman of the Cooper Review, Jeremy Cooper,

has promised not to introduce a policy cane toad, but

to do so he must understand what alien concepts

really are.

Mike Taylor


10 EDITORIAL www.superreview.com.au

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CMSF – looking forward,

This year marks the 20th an-niversary of the first Confer-ence of Major Superannuation

Funds (CMSFs) at which the formerTreasurer and then Prime Minis-ter, Paul Keating, signalled whatproved to be the policy foundationsfor Australia’s current superannua-tion regime.

Little wonder then that this year’sCMSF is focusing not just on thepast two decades of superannuationbut is themed ‘The Next 20 Years’.

Indeed, the chief executive of theAustralian Institute of Superannu-ation Trustees, Fiona Reynolds, willbe seeking to establish the tenorof that theme when she and the na-tional secretary of the AustralianWorkers’ Union, Paul Howes, use theconference’s opening plenary to ex-amine what the superannuation sec-tor might look like in 20 years’ time.

Interestingly, the conferenceschedule draws parallels betweenHowes as a young labour leader withthe Keating of two decades’ ago, butwhereas 20 years’ ago Keating wasin a position to help set the agen-da for superannuation, this year’sCMSF is being held at a time whenthe agenda is being debated by agovernment inquiry – the CooperReview.

That fact will make the presenceof the chairman of the Cooper Re-view, Jeremy Cooper, all the moreinteresting when he addresses thesecond plenary of the conferencejust a few hours after Reynolds andHowes discuss their views of the fu-ture possibilities for the industry.

The second plenary will be madeall the more interesting because

while Cooper will be the focal point,he will be engaging with a panel thatincludes one of the men who helpedadvise the Hawke/Keating Govern-ment in its delivery of the super-annuation guarantee – the chairmanof State Super, Don Russell.

Also on the panel will be the chairof Media Super, Gerard Noonan, anda trustee director of First StateSuper, Cristina Cifuentes.

It will be one of the few occasionswhere Cooper will have been con-fronted by a panel with the experi-ence brought by Russell, Noonan andCifuentes, and it seems likely thatthe Cooper Review chairman willhave many of his publicly stated po-sitions put to the test.

A few days later, the views of theindustry on the Cooper Review willbe canvassed in a plenary sessionthat will involve Reynolds, the chiefexecutive of the Industry Super Net-work, David Whiteley, the chief ex-ecutive of the Association of Super-annuation Funds of Australia,Pauline Vamos, and the chief ex-ecutive of the Superannuation Pro-fessionals’ Association of Australia,Andrea Slattery.

The Conference of Major Superannuation Funds

is now 20-years-old and there can be no better

occasion on which to examine what the industry

may look like in another two decades.


12 CMSF PREVIEW www.superreview.com.au

Fiona Reynolds

While Cooper will be thefocal point, he will beengaging with a panel

that includes one of themen who helped advise

the Hawke/KeatingGovernment in its delivery

of the superannuationguarantee.

WITH a number of mergers having al-ready occurred and discussions con-tinuing between superannuation fundsaround the possibility of more, thisyear’s Conference of Major Superan-nuation Funds will see three fund chiefexecutives and a chairman discussingthe benefits and deficits.

In a breakout workshop session fo-cusing on fund consolidation and co-operation, the chairman of MediaSuper, Gerard Noonan, will come to-gether with the chief executive ofFirstSuper, Graeme Russell, the chiefexecutive of Vision Super, Rob Brooks,and the chief executive of QuadrantSuper, Wayne Davy.

Noonan is expected to bring a par-ticular level of insight to the sessionin circumstances where Media Superis the product of the merger, last year,of the journalist and entertainment-based JUST Super and the printing in-dustries-based Print Super.

The discussion is expected to notonly canvas the difficulties in under-

taking mergers between funds butwhether, in fact, the additional scalethat is achieved actually delivers thesorts of benefits the parties want.

The discussion also comes at a timewhen the chairman of the Cooper Re-view, Jeremy Cooper, has canvassedthe probability of a future Australiansuperannuation industry made up offewer but larger funds. SR

looking backConsolidation questioned


www.superreview.com.au CMSF PREVIEW 13

Rob Brooks

MONDAY

11:20am – 12:20pm Workshop 1CTax in super: Role of the proactive andcompetitive trusteeSpeakers: Ramani Venkatramani, generalmanager, Australian Prudential RegulationAuthority, and Graeme Arnott, chiefoperating officer, First State Super

2.35pm – 3.30pm Workshop 2CMedicare and the new clearing houseSpeaker: Mark Jackson, general manager,compliance and general programs division,Medicare Australia

TUESDAY

9.50am – 10.45am Workshop 3CBeyond the GFC – Getting the balance right

Speaker: Michael O’Neill, chief executive,National Seniors Australia

11.15am – 12.15pm Workshop 4AIntra-fund advice – Your opportunity togive members what they really needSpeakers: Debby Blakey, executivemanager – member advice, HESTA SuperFund, and Joanne Caruana, manageremployer services, Equipsuper

WEDNESDAY

9.50am – 10.40am Workshop 5ERegulatory updates – ASICSpeaker: Louise du Pre-Alba, seniorexecutive leader – superannuation funds,Australian Securities and InvestmentsCommission

Hot Sessions


14 SUPER FUND PERFORMANCE www.superreview.com.au

If the collapse in equitymarkets in 2008-09 servedto reveal the degree to

which most retail mastertrusts are unduly exposed tolisted investments, 2009-10has revealed the degree towhich some industry fundshave suffered due to theiroverexposure to unlisted in-vestments.

The result? Retail mastertrusts broadly outperformedindustry funds in the secondhalf of calendar 2009.

However, the degree towhich the performance of themaster trusts is only as goodas the performance of equi-ties markets was reflected bytheir less than stellar per-formance in the openingmonths of 2010 – a periodduring which industry fundsreasserted themselves.

Superannuation is, ofcourse, meant to be a long-term investment, and mostexperienced commentatorsargue that looking at super-annuation fund returns overanything less than 12 monthsis irrelevant and that you canreally only gain a sensible ap-preciation of relative per-formance by looking overthree, five and even 10 years.

And it is this fact thathas coloured the approachof research house ChantWest in generating its 2010fund ratings – an analysis

that acknowledges the rela-tive outperformance of the re-tail master trusts through2009, but then points to in-dustry funds being the betterbet over the longer haul.

“We don’t rate funds high-er or lower just on the basisof one year’s performance.Otherwise we’d have down-graded a lot of master trustswhen they performed rela-tively poorly in 2008 andthen upgraded them basedon last year’s performance,”explains Chant West princi-pal Warren Chant.

“It doesn’t work like that,”he says. “What we look foris the quality of their invest-ment philosophy, processand people, including theirin-house resources and ex-ternal asset consultants.That doesn’t move just be-cause markets move againstyou in the short-term.”

Chant says the reason not-for-profit funds achieved high-er ratings in the analysis is tobe found in their overall valueproposition.

“The better industry fundshave relatively low admin-istration fees, excellent in-vestment processes, low costinsurance and an increasingrange of member services,including some excellentmember education,” he says.

Chant says it was the totalpackage offered by industry

funds that resulted in themscoring highly.

While the Chant West 2010fund ratings deal with a com-pilation of factors, includingfees, investment processesand service offerings, the ta-bles published in this edition(pages 14 to 17) are based oninvestment returns to the endof December.

As such, the performancetables dealing with growthplace Colonial First State

First Choice Moderate in thelead position over one yearwith a return of 24.2 percent, followed by BUSS(Q)with a return of 21.7 percent and then Russell Bal-anced with 21.7 per cent.

However, when the datais looked at over a five-yearperiod, CBA OSA Mix 70emerges in top spot with a re-turn of 6.8 per cent, followedby Catholic Super Mod Ag-gressive with a return 6.5 per

cent and Catholic SuperBalanced with 6.4 per cent.

Taken over three and five-year returns, the data in-dicates that more not-for-profit funds appear in thetop-10 data on returns thanretail master trusts. How-ever, the returns generatedby those retail master truststhat consistently rank in thetop 10 exhibit less volatili-ty than the not-for-profitfunds. SR

Last year may well be remembered as

the year in which the retail master

trusts outperformed the industry funds

but, taken over the long haul, the data

still favours the not-for-profit funds.

Fund returns in transition

www.superreview.com.au SUPER FUND PERFORMANCE 15


Fund Asset Consultant Option % of 3 Months 6 Months 1 Year 2 Years 3 Years 5 Years 7 Years Standard Size Growth Deviation

Assets 5 yrs$m % % % % % % pa % pa % pa % pa

AGEST Growth Frontier 119 93.0 2.4 (39) 13.9 (35) 12.6 (42) -8.4 (35) -2.9 (30) - - - - -

AMP FD Growth Mercer 1,240 89.0 3.3 (7) 15.8 (22) 20.5 (11) -8.0 (34) -3.2 (33) 4.4 (24) 6.7 (23) 10.5

AMP RIL Growth Mercer 53 86.0 2.3 (40) 16.7 (13) 19.4 (18) -6.2 (16) -2.2 (22) 5.4 (12) - - 10.3

Aon Growth Russell 208 85.0 0.2 (47) 14.3 (32) 16.4 (33) -7.3 (28) -2.8 (28) 3.0 (39) 5.3 (35) 9.6

ARIA PSSap Aggressive Internal 46 88.0 2.8 (23) 13.7 (37) 16.4 (32) -7.5 (30) -1.1 (12) - - - - -

Asgard SMA Growth Advance n.a. 83.0 2.8 (24) 15.8 (23) 17.7 (29) -6.5 (22) -2.5 (26) 4.6 (21) 6.6 (26) 9.9

Asset High Growth Mercer 503 91.5 3.3 (6) 17.3 (8) 18.4 (23) -6.9 (24) -3.2 (32) 4.0 (30) 6.3 (28) 10.3

AustralianSuper High Growth Frontier / JANA 1,502 88.5 2.9 (21) 13.2 (39) 12.5 (43) -8.4 (36) -2.0 (19) 5.1 (14) 7.6 (10) 8.9

Aviva PS High Growth Mercer 131 85.0 2.5 (37) 19.6 (2) 23.2 (4) -6.7 (23) -2.3 (23) 4.5 (23) - - 11.5

AXA SD Growth ipac 458 85.0 2.8 (22) 16.3 (19) 19.1 (20) -8.5 (38) -3.7 (37) 3.6 (35) 5.8 (34) 10.5

BT MM Growth Watson Wyatt 420 84.0 3.5 (2) 19.2 (4) 23.6 (2) -8.7 (40) -4.6 (41) 2.9 (41) 5.8 (33) 12.4

BUSS (Q) High Growth Frontier 73 92.5 4.2 (1) 11.9 (43) 13.0 (41) -5.8 (12) 0.1 (5) 6.6 (3) - - 9.1

CareSuper Growth JANA 159 90.0 3.1 (12) 14.8 (29) 18.6 (21) -5.0 (5) 0.2 (4) 6.3 (5) 8.4 (6) 8.8

Catholic Super & Ret Growth Mercer 309 85.0 2.9 (15) 15.0 (28) 17.6 (30) -5.8 (11) -1.8 (17) 5.1 (15) - - 9.5

Catholic Super Aggressive JANA 223 96.0 2.9 (19) 17.3 (10) 24.3 (1) -5.2 (7) 0.3 (2) 6.8 (2) 8.9 (1) 10.8

CBA OSF Mix 90 Watson Wyatt n.a. 90.0 2.6 (35) 14.1 (34) 17.8 (27) -4.4 (3) 1.0 (1) 7.1 (1) 8.5 (4) 8.9

Cbus High Growth Frontier 436 95.0 2.6 (34) 17.3 (9) 23.0 (5) -6.2 (17) -0.9 (10) 5.9 (8) 7.8 (8) 11.0

EISS High Growth Mercer n.a. 90.0 3.4 (5) 15.9 (21) 18.2 (25) -9.8 (42) -4.8 (44) 3.0 (38) 5.9 (32) 11.2

Equipsuper Growth JANA 41 85.0 2.7 (27) 14.3 (33) 16.7 (31) -4.7 (4) -0.5 (8) - - - - -

ESSSuper High Growth VFMC 7 95.0 2.9 (16) 10.0 (47) 9.2 (45) - - - - - - - - -

Fiducian Growth Fiducian 101 81.0 2.4 (38) 18.6 (6) 20.2 (12) -8.6 (39) -4.0 (39) 3.8 (32) 6.8 (22) 11.1

FSS (NSW) High Growth JANA 1,253 90.0 2.2 (41) 13.3 (38) 14.9 (36) -6.4 (20) -2.0 (20) 5.0 (17) 7.6 (12) 9.6

GESB Super Growth Mercer 39 85.0 3.1 (11) 17.5 (7) 20.9 (10) -7.4 (29) - - - - - - -

Health Super LT Growth Watson Wyatt 3,451 85.0 3.2 (8) 14.7 (30) 18.2 (24) -5.7 (10) -1.2 (13) 5.7 (9) 7.6 (11) 9.0

HESTA Shares Plus Frontier n.a. 90.0 2.9 (20) 15.0 (27) 18.5 (22) -5.2 (6) -0.4 (7) 5.7 (10) 7.8 (9) 9.2

HOSTPLUS Shares Plus JANA 123 85.0 2.6 (29) 13.1 (41) 15.7 (34) -5.9 (14) 0.1 (6) 6.5 (4) 8.7 (3) 8.7

ING OptiMix Growth OptiMix 1,269 81.0 2.8 (25) 18.7 (5) 22.8 (6) -6.5 (21) -1.6 (16) 4.9 (18) 7.5 (13) 10.6

Intrust Super Growth JANA n.a. 90.0 3.1 (10) 16.6 (15) 19.6 (15) -9.1 (41) -2.9 (31) 3.9 (31) 7.3 (16) 10.9

Legal Super Assertive JANA 1,898 85.0 2.7 (28) 15.3 (26) 13.9 (38) -7.9 (33) -2.7 (27) 4.1 (29) - - 9.7

LGSS High Growth Mercer n.a. 90.0 3.5 (3) 16.4 (17) 18.2 (26) -10.1 (43) -4.6 (42) 3.2 (36) 6.3 (29) 11.2

Media Super Growth Frontier 202 85.0 2.6 (32) 11.8 (44) 13.7 (39) -6.1 (15) -1.2 (14) 5.3 (13) 7.3 (14) 8.2

Maritime Super Growth JANA 1,264 90.0 2.6 (30) 12.2 (42) 10.8 (44) -10.3 (44) -4.6 (43) 3.8 (33) 6.9 (21) 9.0

Mercer High Growth Mercer 645 85.0 1.7 (45) 16.1 (20) 19.5 (17) -6.2 (19) -1.9 (18) 5.0 (16) 7.3 (15) 10.3

Mercer High Growth Plus Mercer 30 85.0 1.6 (46) 16.6 (14) 22.3 (8) -6.2 (18) -2.0 (21) - - - - -

MLC Assertive MLC 73 85.0 3.1 (13) 16.8 (12) 19.8 (14) -7.6 (31) -2.8 (29) 4.2 (27) 6.7 (24) 10.8

MLC Horizon 5 MLC 5,969 85.0 3.1 (9) 16.9 (11) 19.9 (13) -7.2 (27) -2.5 (25) 4.5 (22) 6.9 (20) 10.7

MTAA Balanced Access 4,409 95.0 0.2 (48) 4.5 (48) -9.3 (47) -14.0 (47) -5.6 (45) 3.0 (40) 6.1 (30) 7.1

MTAA Growth Access 182 97.0 0.0 (49) 3.8 (49) -12.0 (48) -12.3 (46) -3.6 (36) 4.4 (26) 6.9 (19) 6.5

NGS Super High Growth JANA 14 85.0 2.6 (33) 15.6 (25) 21.3 (9) -2.3 (1) - - - - - - -

Optimum High Growth Intech 32 90.0 2.6 (31) 16.5 (16) 22.5 (7) -7.1 (26) -4.2 (40) 3.2 (37) 6.4 (27) 11.5

Plum Pre-Mixed Assertive MLC 828 83.0 2.8 (26) 16.3 (18) 19.2 (19) -6.9 (25) -2.4 (24) 4.6 (20) - - 10.4

QSuper High Growth QIC 952 85.0 2.2 (42) 13.8 (36) 15.0 (35) -8.4 (37) -3.5 (35) 4.2 (28) 7.9 (7) 10.7

REST High Growth JANA 254 95.0 2.9 (18) 14.4 (31) 17.7 (28) -4.3 (2) 0.3 (3) 6.2 (6) 8.9 (2) 8.6

Russell Growth Russell 575 90.0 3.5 (4) 20.7 (1) 23.3 (3) -7.7 (32) -3.3 (34) 4.4 (25) 7.1 (18) 12.1

Suncorp High Growth Intech 23 90.0 3.0 (14) 19.2 (3) - - - - - - - - - - -

Tasplan LT Growth Mercer 54 90.0 2.9 (17) 15.7 (24) 19.6 (16) -5.4 (8) -1.3 (15) 5.4 (11) 7.1 (17) 9.8

UniSuper Growth UniSuper 3,032 85.0 2.6 (36) 13.1 (40) 14.0 (37) -5.6 (9) -0.7 (9) 5.9 (7) 8.5 (5) 8.3

Vision Super Growth Frontier 119 83.0 2.0 (44) 11.2 (45) 13.5 (40) -5.9 (13) -1.1 (11) 4.7 (19) 6.6 (25) 7.7

Westscheme Trustees Selection Access 2,580 97.0 2.0 (43) 10.2 (46) 3.5 (46) -10.8 (45) -3.8 (38) 3.7 (34) 6.0 (31) 7.9

Number of funds 49 49 48 47 45 41 35 41

Upper Quartile 90.0 3.1 16.7 20.0 -5.9 -1.1 5.4 7.7 10.8

Median 88.0 2.8 15.6 18.2 -6.9 -2.3 4.6 7.1 9.9

Lower Quartile 85.0 2.5 13.7 14.7 -8.4 -3.3 3.9 6.5 8.9

Vanguard High Growth 90.0 2.4 16.9 18.9 -7.9 -3.3 4.7 7.1 11.3

Tax exempt funds

Super SA High Growth Russell 545 94.0 3.1 17.0 21.4 -10.3 -4.1 4.7 8.0 12.3

Vanguard High Growth (before tax) 90.0 2.6 18.8 21.0 -9.0 -4.0 4.6 7.3 12.5

High Growth (81 - 100%) Net returns for periods to 31 December 2009

Source: Chant West


16 SUPER FUND PERFORMANCE www.superreview.com.au

Fund Asset Consultant Option % of 3 Months 6 Months 1 Year 2 Years 3 Years 5 Years 7 Years Standard Size Growth Deviation

Assets 5 yrs$m % % % % % % pa % pa % pa % pa

AGEST Balanced Frontier 1,861 72.0 1.7 (58) 9.6 (58) 2.9 (60) -6.7 (55) -1.6 (44) 4.7 (39) 6.8 (32) 7.7AMP FD Balanced Mercer 6,346 75.0 3.0 (12) 14.8 (13) 18.8 (11) -6.5 (51) -2.5 (52) 4.2 (46) 6.2 (40) 9.1AMP RIL Balanced Mercer 172 74.0 2.1 (52) 12.3 (36) 15.8 (23) -4.3 (20) -0.4 (27) 5.6 (18) - - 8.2Aon Balanced Russell 664 70.0 0.0 (62) 12.3 (34) 14.6 (33) -5.5 (42) -1.6 (43) 3.5 (52) 5.8 (46) 8.2ARIA CSS Internal 4,634 78.0 2.5 (37) 10.8 (50) 11.2 (48) -5.6 (43) -0.1 (23) 5.0 (30) 7.4 (18) 7.1ARIA PSS Internal 11,142 78.0 2.5 (35) 10.7 (51) 11.1 (50) -5.7 (44) 0.0 (19) 5.1 (27) 7.5 (16) 7.1ARIA PSSap Trustee Choice Internal 1,500 78.0 2.5 (35) 10.9 (49) 11.4 (47) -5.4 (41) -0.1 (20) - - - - -Asgard SMA Balanced Advance n.a. 70.0 2.6 (24) 13.5 (23) 15.4 (29) -3.6 (14) -0.6 (29) 5.2 (25) 6.8 (30) 8.0Asset Medium Growth Mercer 548 70.0 2.7 (22) 14.7 (14) 16.1 (22) -4.5 (21) -1.7 (45) 4.1 (48) 6.0 (44) 8.6Auscoal Growth Mercer 1,526 80.0 3.0 (10) 11.0 (48) 15.7 (24) -5.3 (38) -0.7 (31) 5.1 (28) 6.5 (38) 8.2AustralianSuper Balanced Frontier / JANA 25,237 73.0 3.2 (5) 12.0 (39) 10.2 (54) -5.7 (45) -0.1 (21) 5.9 (9) 7.9 (6) 7.3AustSafe Balanced JANA 930 73.0 3.8 (1) 13.5 (24) 16.4 (18) -6.8 (56) -1.3 (39) 4.8 (36) 6.8 (29) 8.8Aviva PS Growth Mercer 227 70.0 2.2 (47) 17.2 (5) 20.1 (5) -5.1 (34) -1.4 (40) 4.5 (40) - - 9.7AXA SD Balanced ipac 1,380 70.0 2.5 (34) 14.1 (19) 16.4 (19) -6.1 (49) -2.3 (50) 3.7 (50) 5.8 (47) 8.7BT MM Balanced Watson Wyatt 1,068 71.0 3.1 (8) 17.4 (3) 21.7 (2) -7.0 (58) -3.6 (57) 2.9 (56) 5.2 (50) 10.8BUSS (Q) Balanced Growth Frontier 1,416 75.0 3.2 (6) 8.6 (61) 7.0 (58) -4.9 (27) 0.5 (11) 5.8 (11) 7.6 (14) 7.0CareSuper Balanced JANA 2,223 75.0 2.6 (26) 11.3 (46) 11.1 (49) -4.2 (18) 1.0 (7) 6.0 (7) 7.9 (9) 6.6Catholic Super & Ret Balanced Mercer 2,818 74.0 2.4 (39) 11.9 (40) 13.2 (39) -4.6 (22) -1.2 (37) 4.7 (38) - - 7.5Catholic Super Balanced JANA 1,945 70.0 2.4 (40) 11.7 (44) 13.9 (38) -3.7 (15) 1.2 (4) 6.4 (3) 8.0 (2) 7.4Catholic Super Mod. Aggressive JANA 65 80.0 2.6 (27) 14.7 (15) 19.8 (6) -4.1 (17) 0.9 (8) 6.5 (2) - - 9.0CBA OSF Mix 70 Watson Wyatt n.a. 70.0 2.4 (38) 12.1 (37) 15.5 (28) -2.0 (2) 2.1 (2) 6.8 (1) 7.9 (5) 7.1Cbus Moderate Growth Frontier 93 63.0 2.0 (56) 9.6 (59) 10.6 (52) -3.1 (8) - - - - - - -Cbus Core Strategy Frontier 12,589 76.5 2.1 (51) 10.5 (53) 8.5 (57) -4.9 (26) 0.5 (12) 6.0 (8) 7.8 (10) 6.9CFS FirstChoice Growth Mercer 2,707 80.0 2.9 (14) 18.5 (1) 24.2 (1) -6.7 (54) -2.8 (55) 4.2 (47) 6.0 (43) 11.3EISS Diversified Mercer n.a. 70.0 3.0 (9) 13.1 (26) 14.9 (31) -6.5 (52) -2.5 (53) 3.4 (53) 5.6 (48) 8.6Equipsuper Balanced Growth JANA 1,411 70.0 2.3 (41) 11.3 (47) 12.9 (42) -2.9 (6) 0.4 (13) 5.6 (14) 7.7 (13) 6.8ESSSuper Growth VFMC 135 80.0 2.5 (30) 10.4 (54) 12.0 (44) -3.2 (10) 0.6 (10) 5.6 (16) 7.8 (12) 6.0Fiducian Balanced Fiducian 169 69.0 2.1 (49) 16.2 (7) 19.1 (9) -5.8 (46) -2.1 (48) 4.3 (45) 6.8 (31) 9.4FSS (NSW) Diversified JANA 11,617 70.0 1.8 (57) 10.6 (52) 12.2 (43) -3.6 (12) -0.1 (22) 5.2 (23) 7.3 (21) 7.3GESB Super Balanced Growth Mercer 293 70.0 2.0 (53) 13.7 (22) 16.9 (17) -5.1 (35) - - - - - - -Health Super MT Growth Watson Wyatt 2,080 65.0 2.8 (17) 11.8 (42) 14.4 (35) -3.2 (9) 0.4 (14) 5.6 (17) 7.1 (25) 6.7HESTA Core Pool Frontier n.a. 72.5 2.3 (44) 10.4 (55) 9.4 (56) -5.2 (36) -0.3 (24) 5.2 (24) 7.3 (20) 6.7HOSTPLUS Balanced JANA 6,266 74.0 2.3 (45) 9.1 (60) 6.3 (59) -6.1 (48) -0.3 (26) 5.4 (21) 7.6 (15) 6.5ING OptiMix Balanced OptiMix 3,146 70.0 2.5 (29) 16.4 (6) 19.6 (7) -5.0 (31) -0.9 (32) 4.9 (32) 7.1 (24) 9.3Intrust Super Balanced JANA n.a. 75.0 2.8 (19) 13.3 (25) 14.2 (37) -5.0 (30) 0.1 (17) 5.5 (19) 7.9 (8) 7.9JANA Assertive JANA 224 80.0 2.1 (48) 14.2 (18) 17.1 (16) -5.3 (40) -0.3 (25) 5.4 (20) 7.2 (22) 8.7JANA Moderate JANA 535 73.0 2.0 (55) 13.0 (27) 15.7 (25) -4.0 (16) 0.3 (16) 5.4 (22) 7.0 (26) 7.6Legal Super Moderate JANA 763 75.0 3.1 (7) 12.7 (31) 11.4 (46) -4.6 (23) -0.5 (28) 5.1 (26) 6.8 (28) 7.4LGSS Diversified Mercer n.a. 70.0 3.2 (4) 14.0 (20) 14.2 (36) -7.2 (59) -2.8 (56) 3.4 (54) 5.8 (45) 8.7LUCRF Balanced Watson Wyatt 2,205 78.0 2.0 (54) 9.7 (57) 11.8 (45) -6.9 (57) -1.5 (42) 4.8 (34) 6.7 (35) 8.1Maritime Super Balanced JANA 949 70.0 3.2 (3) 12.3 (35) 9.7 (55) -6.3 (50) -1.8 (47) 3.9 (49) - - 7.1Media Super Balanced Frontier 1,911 76.0 2.3 (43) 10.2 (56) 11.1 (51) -5.0 (32) -0.7 (30) 4.9 (31) 6.7 (33) 6.7Mercer Growth Mercer 4,961 70.0 0.9 (61) 13.0 (30) 16.3 (20) -5.0 (28) -1.1 (36) 4.8 (33) 6.7 (34) 8.7Mercer Growth Plus Mercer 89 70.0 1.3 (60) 14.0 (21) 17.8 (13) -5.3 (39) -1.4 (41) - - - - -MLC Growth MLC 1,887 79.0 2.9 (13) 16.1 (8) 19.1 (10) -6.6 (53) -2.1 (49) 4.4 (43) 6.7 (36) 10.1MLC Horizon 4 MLC 6,003 70.0 2.8 (18) 14.9 (10) 17.7 (14) -5.0 (29) -1.0 (33) 4.8 (37) 6.9 (27) 9.0MLC Moderate MLC 1,826 70.0 2.7 (21) 14.9 (11) 17.9 (12) -5.2 (37) -1.3 (38) 4.5 (41) 6.6 (37) 9.1NGS Super Diversified JANA 2,513 70.0 2.1 (50) 12.4 (33) 15.3 (30) -2.6 (4) 1.4 (3) 6.2 (5) 7.8 (11) 7.4Optimum Growth Intech 107 79.0 2.3 (46) 14.4 (17) 19.4 (8) -5.1 (33) -2.7 (54) 3.7 (51) 6.0 (42) 9.8Plum Pre-Mixed Moderate MLC 486 70.0 2.5 (32) 14.6 (16) 17.3 (15) -4.8 (25) -1.1 (35) 4.8 (35) - - 8.9QSuper Balanced QIC 14,727 67.5 2.5 (28) 13.0 (28) 14.5 (34) -2.9 (7) 0.3 (15) 5.6 (15) 8.0 (4) 8.1REST Core JANA 15,573 74.0 2.9 (15) 13.0 (29) 16.1 (21) -0.8 (1) 2.3 (1) 6.4 (4) 8.0 (3) 6.6REST Diversified JANA 189 80.0 2.8 (20) 12.6 (32) 15.7 (26) -2.8 (5) 1.1 (5) 6.1 (6) 8.4 (1) 7.2Russell Balanced Russell 2,004 70.0 3.0 (11) 17.3 (4) 20.4 (4) -4.7 (24) -1.7 (46) 4.4 (44) 6.5 (39) 9.7Russell Balanced Opps Russell 73 70.0 3.4 (2) 17.4 (2) 21.7 (3) -4.2 (19) - - - - - - -Suncorp Growth Intech 30 79.0 2.5 (31) 15.0 (9) - - - - - - - - - - -Sunsuper Balanced Mercer 11,014 70.0 2.7 (23) 11.9 (41) 13.0 (40) -3.6 (13) 0.1 (18) 5.7 (13) 7.5 (17) 7.4Sunsuper Growth Mercer 1,256 80.0 2.8 (16) 11.4 (45) 10.3 (53) -7.5 (60) -2.5 (51) 5.1 (29) 7.4 (19) 8.5Tasplan Balanced Mercer 1,130 70.0 2.6 (25) 12.0 (38) 15.6 (27) -2.1 (3) 1.0 (6) 5.9 (10) 7.1 (23) 7.1UniSuper Balanced UniSuper 6,377 70.0 2.3 (42) 11.7 (43) 12.9 (41) -3.2 (11) 0.6 (9) 5.8 (12) 7.9 (7) 6.9United Capital Growth United 945 69.5 2.5 (33) 14.8 (12) 14.8 (32) -8.3 (61) -4.4 (58) 2.9 (55) 5.2 (49) 9.4Vision Super Balanced Growth Frontier 1,634 73.5 1.6 (59) 7.0 (62) 2.3 (61) -6.1 (47) -1.1 (34) 4.5 (42) 6.2 (41) 5.5

Number of funds 62 62 61 61 58 56 50 56Upper Quartile 75.8 2.8 14.5 17.1 -4.0 0.3 5.6 7.7 8.8Median 71.5 2.5 12.6 14.9 -5.0 -0.7 5.1 7.0 7.9Lower Quartile 70.0 2.2 11.3 11.4 -5.8 -1.6 4.4 6.6 7.1Vanguard Growth 70.0 1.9 13.9 15.7 -4.3 -1.0 5.0 6.9 8.7

Tax exempt fundsGESB (WSS) Growth Mercer 821 75.0 2.7 15.6 18.8 -6.6 -2.0 4.9 7.4 10.3Super SA Balanced Russell 5,359 68.0 2.8 13.5 16.8 -7.1 -2.2 4.8 7.5 9.5Super SA Growth Russell 5,728 78.0 2.8 14.4 18.0 -8.8 -3.2 4.6 7.7 10.7Vanguard Growth (before tax) 70.0 2.3 15.4 17.5 -4.9 -1.3 5.2 7.3 9.7

Growth (61 - 80%) Net returns for periods to 31 December 2009

Source: Chant West

www.superreview.com.au SUPER FUND PERFORMANCE 17

Fund Asset Consultant Option % of 3 Months 6 Months 1 Year 2 Years 3 Years 5 Years 7 Years Standard

Size Growth Deviation

Assets 5 yrs

$m % % % % % % pa % pa % pa % pa

AGEST Moderate Frontier 27 58.0 1.8 (28) 9.1 (29) 7.0 (37) -4.0 (33) -0.2 (24) - - - - -

AMP FD Mod. Conservative Mercer 607 50.0 2.4 (13) 11.4 (10) 15.7 (4) -3.5 (32) -0.8 (28) 4.3 (21) - - 6.7

ARIA PSSap Balanced Internal 15 49.0 2.0 (24) 8.1 (36) 9.7 (32) -2.3 (22) 1.4 (13) - - - - -

Asgard SMA Moderate Advance n.a. 50.0 2.3 (17) 10.9 (18) 12.7 (17) 0.0 (5) 2.3 (3) 6.0 (2) 7.0 (3) 5.6

Auscoal Balanced Mercer 1,375 59.0 2.6 (6) 9.0 (30) 12.8 (16) -2.4 (24) 0.9 (16) 5.7 (4) 6.7 (6) 6.2

AustralianSuper Conserv. Balanced Frontier / JANA 95 54.5 2.7 (2) 10.0 (21) 9.3 (34) -2.9 (28) - - - - - - -

AustSafe Capital Stable JANA 6 45.0 2.4 (14) 8.3 (33) 10.2 (30) -0.4 (7) 2.1 (6) 4.9 (11) 5.5 (14) 4.1

Aviva PS Balanced Mercer 304 50.0 1.7 (33) 13.6 (3) 15.7 (5) -2.0 (21) 0.4 (20) 4.7 (15) - - 7.0

AXA SD Secure Growth ipac 122 50.0 2.2 (20) 11.7 (7) 13.5 (11) -3.0 (29) -0.5 (25) 3.7 (22) 5.3 (17) 6.4

CareSuper Conserv. Balanced JANA 13 50.0 2.3 (18) 9.5 (27) 12.0 (23) -0.8 (10) 2.2 (5) - - - - -

Catholic Super Mod. Conservative JANA 16 45.0 1.8 (30) 9.3 (28) 13.1 (14) -1.4 (16) 2.1 (7) 5.7 (3) - - 5.7

CBA OSF Mix 50 Watson Wyatt n.a. 50.0 2.2 (19) 9.8 (24) 12.7 (18) 0.4 (3) 3.1 (1) 6.2 (1) 7.1 (2) 5.2

CFS FirstChoice Moderate Mercer 3,891 60.0 2.7 (3) 15.3 (1) 20.5 (1) -3.3 (30) -0.6 (26) 4.6 (17) 5.9 (13) 8.8

EISS Balanced Mercer n.a. 50.0 2.6 (5) 11.4 (11) 12.4 (20) -3.3 (31) -0.6 (27) 3.6 (23) 5.2 (18) 6.4

Equipsuper Balanced JANA 19 50.0 1.7 (31) 8.1 (35) 9.1 (35) 0.6 (2) 2.8 (2) - - - - -

ESSSuper Balanced VFMC 121 60.0 2.3 (16) 8.0 (37) 9.1 (36) -1.5 (17) 1.3 (14) 4.9 (12) - - 4.3

FSS (NSW) Balanced JANA 3,358 50.0 1.5 (37) 8.2 (34) 9.5 (33) -0.8 (11) 1.6 (12) 5.3 (9) 6.8 (5) 5.1

GESB Super Bal. Conservative Mercer 146 60.0 2.6 (4) 13.4 (4) 16.5 (3) -2.9 (27) - - - - - - -

Health Super Balanced Watson Wyatt 1,036 45.0 2.5 (11) 9.5 (26) 11.7 (24) -0.8 (9) 1.6 (11) 5.2 (10) - - 4.9

HOSTPLUS Conserv. Balanced JANA 17 50.0 1.8 (27) 8.0 (38) 10.7 (28) 0.6 (1) - - - - - - -

ING OptiMix Moderate OptiMix 1,431 50.0 1.9 (26) 13.1 (5) 15.0 (6) -1.7 (18) 0.5 (19) 4.6 (18) - - 6.7

JANA Cautious JANA 56 50.0 1.6 (36) 9.9 (23) 11.6 (25) -1.3 (14) 2.0 (8) 5.3 (8) 6.5 (8) 5.1

Legal Super Balanced JANA 11 55.0 2.5 (9) 10.9 (17) 11.0 (26) - - - - - - - - -

LGSS Balanced Mercer n.a. 50.0 3.0 (1) 11.2 (13) 10.3 (29) -5.0 (36) -1.7 (30) 3.0 (27) 5.0 (19) 6.5

Mercer Moderate Growth Mercer 466 50.0 0.6 (38) 10.0 (22) 13.3 (13) -2.4 (23) 0.3 (22) 4.7 (16) 6.0 (11) 6.5

MLC Cautious MLC 23 50.0 2.4 (12) 11.2 (14) 13.4 (12) -2.5 (25) 0.3 (23) 4.4 (20) 6.0 (12) 6.5

MLC Horizon 3 MLC 856 50.0 2.5 (10) 11.4 (12) 13.9 (10) -2.0 (20) 0.7 (17) 4.8 (13) 6.3 (9) 6.4

MTAA Conservative Access 51 50.0 0.6 (39) 3.8 (39) -7.6 (38) -8.7 (37) -2.9 (33) 2.5 (28) 4.5 (20) 4.7

NGS Super Conservative JANA 14 50.0 1.6 (34) 9.7 (25) 14.0 (9) 0.3 (4) - - - - - - -

Optimum Balanced Growth Plus Intech 72 59.0 1.6 (35) 11.1 (15) 14.0 (8) -4.4 (34) -2.1 (32) 3.4 (26) 5.5 (15) 7.8

Optimum Balanced Growth Intech 16 57.0 1.8 (29) 11.4 (9) 14.7 (7) -2.6 (26) -0.9 (29) 3.5 (24) - - 7.3

Plum Pre-Mixed Cautious MLC 74 50.0 2.2 (21) 11.0 (16) 13.0 (15) -2.0 (19) 0.6 (18) 4.8 (14) - - 6.3

REST Balanced JANA 103 55.0 2.6 (8) 10.0 (20) 12.5 (19) -0.4 (6) 2.2 (4) 5.6 (5) 7.1 (1) 5.1

Russell Diversified 50 Russell 91 50.0 2.6 (7) 13.7 (2) 17.3 (2) -1.3 (13) 0.3 (21) 4.5 (19) 6.0 (10) 7.0

Suncorp Balanced Intech 25 57.0 1.7 (32) 11.6 (8) - - - - - - - - - - -

Sunsuper Retirement Mercer 254 55.0 2.0 (25) 8.4 (32) 10.9 (27) -1.1 (12) 1.3 (15) 5.4 (7) 6.5 (7) 5.5

UniSuper Conserv. Balanced UniSuper 625 50.0 2.1 (23) 10.0 (19) 12.2 (21) -0.7 (8) 1.9 (9) 5.5 (6) 6.9 (4) 5.5

United Capital Balanced United 834 52.0 2.1 (22) 11.7 (6) 12.2 (22) -4.6 (35) -1.9 (31) 3.4 (25) 5.5 (16) 7.0

Vision Super Balanced Frontier 60 51.0 2.3 (15) 8.9 (31) 10.2 (31) -1.3 (15) 1.7 (10) - - - - -

Number of funds 39 39 38 37 33 28 20 28

Upper Quartile 55.0 2.5 11.4 13.8 -0.8 1.9 5.3 6.7 6.7

Median 50.0 2.2 10.0 12.5 -2.0 0.7 4.7 6.0 6.3

Lower Quartile 50.0 1.8 9.1 10.4 -2.9 -0.5 4.2 5.5 5.2

Vanguard Balanced 50.0 1.5 10.4 11.9 -1.3 0.9 5.1 6.3 6.1

Tax exempt funds

GESB (WSS) Balanced Mercer 4,660 60.0 2.4 13.4 16.5 -3.6 -0.1 5.2 7.2 8.3

Super SA Moderate Russell 21 55.0 2.5 12.2 16.6 -3.8 -0.3 - - -

Vanguard Balanced (before tax) 50.0 1.8 11.5 13.1 -1.7 0.8 5.4 6.9 6.9

Balanced Growth (41 - 60%) Net returns for periods to 31 December 2009

Source: Chant West



18 EQUITIES OUTLOOK www.superreview.com.au

Australian investors, bothinstitutional and retail,have undoubtedly wit-

nessed both ends of the re-turns spectrum in recentyears. This time last year, op-timism was a rare commodi-ty, but much can change in 12months. The share market hasrallied over the back half of2009 and, on that basis, superfunds seemed cautiously op-timistic about a positive 2010.

Yet having come from thelofty heights of double digitreturns, the road to recov-ery could seem a long hardone, and for Elio D’Amato,chief executive officer offund manager and researchhouse Lincoln Indicators,patience is the name of thegame.

“One of the things that al-ways astounds and amazes meis people’s short-term focuson performance,” he said. “In-vestors can look at the sharemarket, see a significant drop,and all of a sudden the worldis going to end.

“Their focus is now, now,now, but equities marketsaren’t like that,” D’Amatocontinued. “They’ve beenaround a long time and thereality is that what we sawthrough the global financialcrisis, in terms of market be-haviour, has only been seenthree times before.

“It’s something we don’t

expect to see again anytimein the near future.”

According to D’Amato,there are simply too manypluses in the Australian and global economies towarrant investors beingoverly concerned.

“The sub-prime mortgagecrisis and its fallout was anunknown,” D’Amato said.“No one knew how muchmoney was tied up in it andinvestors tend to panicwhen an unknown of thatmagnitude impacts upon themarket.

“What we’re seeing at themoment though is a returnto risk appetites,” D’Amatoadded. “Investors are feel-ing more comfortable intheir own skin and that kindof feeling should ensure thatwe won’t see the same sortof lows anytime soon.

“You could say that themarket’s been shored up andwe think it should form thebasis for good returns in thefuture.”

Joseph Brennan, chief in-vestment officer for Van-guard Investments in theAsia-Pacific region, said do-mestic equities performancehad obviously seen quite abounce back during the lat-ter half of 2009.

“Looking at the 2009 re-turns for Australian equities,

you’d have to say that themarket finished the year inquite a good position,” hesaid. “Australia was fortu-nate in that it never reallyentered an official recession.It avoided the worst conse-quences of the financial cri-sis and just as we saw valu-ations peak and come offtheir highs, we’re seeing thereverse of that now.

“The economy seems to bein decent shape and, as aconsequence, the market isanticipating and pricing inan improving picture.”

Echoing thoughts ex-pressed by Brennan, TonyCole, Mercer’s Asia Pacificbusiness leader for invest-ment consulting, said onehad only to look at the stateof the Australian economy

to get a good indication ofhow much the domestic eq-uities market had recovered.

“With respect to the Aus-tralian economy, the recov-ery has been very well es-tablished and it’s been quitestrong,” he said. “Most of thenumbers coming out havebeen surprising on the upside, with recent wages databeing particularly strong.

Superannuation fund returns have

moved back into positive territory over

the past eight months but, as DAMON

TAYLOR reports, many fund executives

believe there is still a need for caution.

The slow road to

recoverywww.superreview.com.au EQUITIES OUTLOOK 19


“So for domestic equitiesthe trend has been one ofironing out the ups anddowns,” continued Cole.“And that process has beenwell justified by what’s happening in the economy.”

The view Mercer was tak-ing, according to Cole, wasthat the domestic equitiesmarket was fairly well valuedwhen looking at growth

rates, profitability and Aus-tralia’s underlying economicstrength.

“The news is obviously alot less positive overseas,”added Cole. “In many cases,what we’re seeing abroad isstill not much more thangreen shoots and, if thestimulatory environmentsthey’re working in are removed, it could quite

easily burn off. “Our story is different be-

cause our economy andother economies in the re-gion are looking good. We’revery fortunate.”

CHALLENGESBut while the recovery

may well be underway, thereremain significant chal-lenges market participants

would be well advised not tounderestimate. Fortunately,there is likely to be oppor-tunity as well.

Commenting on what hur-dles investors, both insti-tutional and retail, mighthave underestimated, GeoffDriver, general manager ofbusiness development andinvestor relations for theAustralian Foundation In-vestment Company (AFIC),said they were almost alleconomy-related.

“The hurdles have got tobe what happens in the Aus-tralian economy,” he said.“We’ve gone through a se-vere dislocation in all fi-nancial markets and busi-nesses have had to pay closeattention to their balancesheets, to cutting costs andso on.

“Australia is well placedbased on its proximity toAsia but interest rates, thereaction of consumers to arate hike and the cost ofcapital are all likely to havean impact on domestic equities.”

Looking at both sides ofthe coin, D’Amato said whilechallenges were indeedpresent, they were also aknown quantity.

“There are always oppor-tunities no matter how theequities market is shapingup,” he said. “At the mo-ment, there is some concernout there over sovereigndebt, but the thing with sov-ereign debt is that investorsknow how much it is andthey know how much riskit implies.

“It isn’t like sub-prime wherethe debt was a huge unknown.”

Continued on page 20 ☞

There are alwaysopportunities nomatter how the

equities market isshaping up.



Giving an insight into howAustralian super fundsmight have handled theirdomestic equities weight-ings through the financialcrisis and into recovery, Colesaid that most funds wouldnow be returning to theirbenchmark allocations.

“What we saw during theglobal financial crisis wasquite a lot of concern overliquidity, particularly fromthe Australian PrudentialRegulation Authority, re-garding funds’ exposure tounlisted assets,” he said.“Our clients had only a mod-erate exposure to unlisted[assets] but they were stilllooking to monitor liquidi-ty and to build up cash sothat they could handle anyredemptions.

“Most got somewhat un-derweight but not a lot un-derweight to domestic eq-uities,” Cole continued.“And, fortunately, we did-n’t have any client needingto quit unlisted assets. Somewere even able to take ad-vantage of the discountsavailable as a result of otherfunds’ liquidity problems.”

But in terms of market re-entry, Cole said Mercer hadadvised its clients to moveoverweight sooner ratherthan later.

“We advised that ourclients go overweight equi-ties in November 2008,” Colesaid. “Obviously the marketdidn’t come back untilMarch this year but we leftthose weightings in placeand I believe most funds areback to their benchmarksnow.”

Yet while Mercer’s advice

to push back into the do-mestic equities marketproved to be a fraction pre-mature, hesitation could beeven more costly and, ac-cording to Cole, super fundexecutives were well awareof this fact.

“I’ve heard people talkingabout it so it must have hap-pened in a small number ofcases but, having said that,I don’t think it was wide-spread,” he said. “Most peo-ple recognise history, thatmarkets turn around beforeeconomies, and I think mostinvestment consultantswould have advised thatthese were unprecedentedcircumstances and that a re-covery had to happen.

“Looking around the worldat China, at Singapore, atIndia, a recovery alwayslooked likely,” Cole added.“It had to happen but therewas also a lot to think aboutoutside of the domestic eq-uities space.”

Alternatively, Brennansaid that while there hadundoubtedly been some in-stances in which institu-tional investors had missedthe recovery, it was possiblethat there had been goodreasons behind their delay.

“Those sorts of decisionscan be driven by many dif-ferent reasons,” he said.“And liquidity is just one ofthem.

“An investor could havea high level plan in placeand yet be nervous aboutpulling the trigger at theright moment and at thetoughest time.”

For his part, D’Amato saidinvestors missing the do-mestic equities recovery hadbeen somewhat inevitable.

“When the bottom fell outof the bucket, everyonewent to cash,” he said. “Butfrom that point it was an ex-ceptionally rapid recovery,and I think many investorshave been left still holdingcash.

“On the other hand, mostsuper funds wouldn’t havemoved too far from theirmandates and so theywouldn’t have lost muchground,” D’Amato contin-ued. “But it was a lot moreof a problem at the allocat-ed pension and self-man-aged super fund level.

“Unfortunately, it’s thefirst steps back up themountain that are thelongest. They’re shorteronce you reach the top.”

Certainly the consensus

from most industry partici-pants seemed to be that theworst of the financial cri-sis was well and truly over.Yet while memories could beshort they were not so shortas to have forgotten the paincaused by mismanagedstocks, and for D’Amato investment habits havechanged as a consequence.

“I think they had to,” hesaid. “Debt wasn’t even con-sidered in early 2007. Peo-ple would have attributedincome stocks as being safestocks when, being gearedup to the eyeballs, theyclearly weren’t.

“So in the short term, yes,I think there will be changesto investment habits, but inthe long term, zigs and zagsand mistakes will again be

☞ Continued from page 19

Unfortunately, it’sthe first steps

back up themountain that are

the longest.They’re shorter

once you reach thetop.

The slow road to

www.superreview.com.au EQUITIES OUTLOOK 21


made,” D’Amato continued.“And getting through that issimply a question of holdingthe best stocks.”

On the other hand, Bren-nan said it was fund man-agers’ investment habitsthat would have changedrather than those of superfunds’ investment teams.

“Super funds end up al-locating to managers inbroad swaths so they’re lessaware of individual stocks,”he said. “The experience ofthe last couple of years alsowasn’t stock specific. I don’tthink there was any partic-ular equity that funds, fundmanagers or investors couldpoint the finger at.”

However, while Brennancouldn’t see super funds’ investment habits changing

as a result of recent expe-rience, he had seen and an-ticipated further changes tooperating models and riskmanagement policies acrossall sectors of the financialservices industry.

“There’s always an in-creased focus on risk man-agement after the industry’sseen a big risk,” he said. “It’sinevitable. In counter partyrisk and securities lendingwe’ve got issues that are inthe spotlight for the firsttime in a long time.

“These sorts of risksaren’t talked about untilthey end up biting you,”Brennan continued. “Sothey’re a huge focus now,and for good reason.

“When times are good theantenna goes down, but it’sback up now and higherthan ever.”

Talking to risk manage-ment at the stock level,D’Amato said that one hadonly to look at various com-panies’ corporate gover-nance statements to see acommon thread forming.

“When you read the corporate governance state-

ments of a number of shares,their policies around gear-ing and debt have changeddramatically,” he said. “It’sa pretty standard mantra, sopeople are obviously askingfor it.

“But while people mayhave changed their behav-iour and will be doing thiskind of thing in the shortterm, I can’t help but seesimilarities with the bush-fires we saw last year in Vic-toria,” continued D’Amato.“Twenty-five years ago wesaw the same thing and peo-ple did their back burningand formulated emergencyresponse plans in themonths that followed. Buttime passes and people wanttrees next door for the out-look, and it happens again.

“What we want is for peo-ple to remember these ex-periences and to heed thelessons learned. But whenrisk appetites run hot andemotion kicks in, there’ssimply no telling what willhappen.”

Of course, when it comesto Australian domestic eq-uities and market perform-ance, the key factor to beconsidered is often the in-terest rate policy of the Re-serve Bank of Australia(RBA). But with rates al-ready at low levels, D’Ama-to said the domestic equitiesmarket had bigger issues tocontend with.

“Historically, equitiesdon’t do so well in a high in-terest rate environment butthey’re incredibly low at themoment,” he said. “The big-ger issue is likely to be com-panies’ access to debt.

“That isn’t to say that wewant that access to be free

flowing,” D’Amato added.“But for good, well-costedprojects, it’s something thatcould significantly impacttheir ability to get good re-turns in the short term.

“You can find good or badreasons coming throughfrom rising interest rates, sowhile they may be a damp-ener in the short term,they’re still nowhere nearthe 8.5 to 9 per cent levelswe saw pre-global financialcrisis.”

Cole said that the mostimportant thing for the eq-uities market remained theAustralian economy.

“Our economy loves grow-ing profitability but it hatesinflation,” he said. “So theRBA is being supportive ofthe equities market by slow-ing things down if and whenthat growth is too strong.

“In all honesty, the earn-ings figures released inFebruary were a bit dis-turbing in that they indi-cated the economy couldperhaps be growing toostrong,” Cole continued.“But just as it’s great thatChina has been seeinggrowth of around 10.5 percent, it’s too fast and I’mconcerned that we’re get-ting pretty close to thatpoint here as well.

“It’s normal after a reces-sion to have a period ofabove trend growth, but itneeds to be very short.”

Comparing Australia’seconomy with others glob-ally, Brennan said there wasalways a lot of focus on theactions of the world’s cen-tral banks.

“In Australia, the RBA

Continued on page 22 ☞

It’s normal after arecession to have a

period of abovetrend growth but itneeds to be very

short.

Elio D’Amato

recovery

provided liquidity to the sys-tem just as central banksaround the world did,” hesaid. “But by virtue of Aus-tralia’s better position, it wasperhaps done for differentreasons and to a lesser degree.

“So if we look at what’sbeing priced into the equi-ties market at the moment,we’re talking about 25 basispoints in the next threemonths and 75 basis pointsin the 12 months after that,”Brennan continued. “But it’sa very different picture inthe United States, wherethere’s nothing priced in forthe next six to nine months.

“It’s a matter of perspec-tive, but I can’t see inter-est rates having a huge im-pact on domestic equitiesinvestment any time soon.”

Naturally, it is not withoutsignificance that Brennancompared the Australianand US equities markets. In-deed, there have long beenviews that the Australianmarket is somewhat inter-twined with that of the Unit-ed States, but according toBrennan, it is getting in-creasingly difficult to makethis claim.

“More and more I’d saywe’re seeing the Australianeconomy and market equat-ing to Asia and other emerg-ing markets rather than theUS,” he said. “And obviouslythe rebound in Asia hasbeen a huge positive for themarket’s recovery.

“But I think the macrothemes moving forward areones that have yet to beplayed out.”

Brennan continued. “China

in terms of its direction and re-covery, the US Federal ReserveSystem and how it and othergovernment entities removethemselves from the world’s fi-nancial systems and the US job-less rate remain key issues.

“The US jobless rate, forinstance, is twice that ofAustralia and it has a con-nection to both inflation andconsumer spending, and Ithink there will be a lot ofglobal economies tested bythe withdrawal of the USconsumer.”

According to Cole, the re-ality of globalisation wasthat all economies weresomewhat intertwined.

“The US used to providethe lead and have a domi-no effect on the rest of theworld but nowadays whatwe’re talking about is thegrowth economies in Asia,and growth is only acceler-ating,” he said. “At the mo-ment, 70 per cent of Aus-tralian exports go to Asiaand, with investment fromthat part of the world in-creasing as well, our futureis much more dependent onwhat happens within ourown region.

“What happens in the USisn’t irrelevant, but whathappens in Asia is just a lotmore relevant,” continuedCole. “And that’s somethingfew would regret because it’sgoing to be a very difficulttime for the US economy,not just now, but for severalyears to come.”

Similarly, D’Amato saidthat while the UnitedStates was home to theworld’s largest equitiesmarket and largest sourceof capital, he could see anincreasing propensity for

the Australian market tostand on its own two feet.

“There’s a complete de-coupling of our exchangewhen we’re feeling confidentabout ourselves,” he said.“But when we’re feeling a bitnervous we tend to followthe US almost as thoughwe’re looking for guidance.

“Currently, we’re in thevery early stages of that de-coupling process, but it willhappen again,” continuedD’Amato. “At some point wewill again look to the US as

the shining light due to itssheer size.”

However, D’Amato has-tened to add that the eco-nomic story was somewhatdifferent.

“In terms of economies,our story is in Asia,” he said.“But while we’re primed forgrowth, there’s a word ofcaution.

“Investors shouldn’t ex-pect returns that runstraight north east – therewill be dips.”

Yet as Australia’s domes-tic equities market contin-ues along the road to recovery, it seems certain

that there are still lessons andexperiences to be learned. ForCole, however, it is almost tooearly to figure out what thoselessons would be.

“Coming out of the global fi-nancial crisis, one of the fewthings we know is that theregulatory rules of our in-vestment environment aregoing to change,” he said. “Wejust don’t know what thatchange will be or how keen-ly we will feel its impact, andit’s a bit difficult to work outhow we should change whenwe don’t know how our envi-ronment is going to [change].

“With respect to investmentstrategy and rebalancing, thereality is that we were in anacute crisis,” Cole continued.“And there was a short periodin there in which all assetclasses went to hell except forvery pure government bondsand cash.

“That says that diversifi-cation was of little use but,fortunately, I think time hasproven the effectiveness of along-term view. If you’ve stuckto diversity then you’ve comethrough well.”

D’Amato said despite re-covery’s windy road, investorsshould remain optimistic.

“I don’t think we’ll be see-ing or talking about the Aus-tralian Stock Exchange reach-ing the 6,800 levels that wesaw in 2007,” he said. “Butwith the strengthening of oureconomy and those in the re-gion and the return to growthof some our traditional trad-ing partners, there will in-evitably be a flow through toprofit statements.

“The momentum is likely toremain positive and we cer-tainly won’t be retesting suchsevere lows anytime soon.” SR



☞ Continued from page 21 With respect toinvestment strategyand rebalancing, the

reality is that wewere in an acute

crisis.

Tony Cole

The slow road to recovery

www.superreview.com.au APPOINTMENTS 23


Niall McConville will joinTower Australia as nationaldealership manager in Mayfrom AIA, where he was also na-tional dealership manager.

McConville has extensiveknowledge of the market andlong-standing relationshipswithin the industry as well as anappreciation of many of Tower’skey strategic partners.

Pat O’Connor, Tower Australiaretail life head of distribution,said attracting a person of Niall’sknowledge and ability highlight-ed Tower Australia’s presence inthe life insurance market.

“Tower Australia has contin-ued to grow its position in theAustralian life insurance mar-ket in recent years and nowholds a top-tier place with acompetitive offer for the inde-pendent financial adviser,” hesaid. “The introduction of theAccelerated offering late lastyear has enhanced our offering,making it easier for advisers andclients to do business with us.

“Niall will be a key player inTower Australia’s continuedsuccess in this market.”

The Association of Superan-nuation Funds of Australia(ASFA) has appointed Cbuschief executive David Atkin asan industry funds representa-tive to the board of directors.

Commenting on the ap-pointment, Pauline Vamos,chief executive officer of ASFA,said: “Two main areas of David’s

expertise include [environ-mental, social and governance]and infrastructure investment,both very significant and on-going issues for the superan-nuation industry at large.

“His contribution and com-mitment to the industry was al-ready acknowledged earlier thisyear when David was appoint-ed Australia’s representative onthe United Nations principles forresponsible investment globalboard, one of 13 members of theboard worldwide,” Vamos added.

“We are very excited at the rolehe will undoubtedly play as amember of the ASFA board.”

Peter Williams has been ap-pointed director of AustralianFoundation Investment Com-pany (AFIC).

Williams has more than 40years of financial services ex-perience. He has been manag-ing director of Equity Trusteessince 2003 and prior to that wasgeneral manager, superannu-ation and portfolio services, atPerpetual. He has also workedas general manager and chiefexecutive of AXA Trustees.

Williams is a director of theTrustee Corporations Associ-ation of Australia, the Aus-tralian Baseball Federation,Olympic Park Sports MedicalCentre and the Foundation forYoung Australians.

The Investment and FinancialServices Association (IFSA)

has appointed Ian Ward-Am-bler, managing director of Gold-man Sachs JBWere Asset Man-agement, to its board.

Ward-Ambler has replacedformer managing director ofAustralian Ethical InvestmentAnne O’Donnell, and joins agrowing line-up of directorsfrom the bigger end of the fundsmanagement space.

GMOhas appointed Geoff Wellsas head of Australian equities,replacing Rick Suvak, who isleaving the company.

Wells will lead GMO’s Aus-tralian equities team, whichconsists of Olivia Engel, MarkThompson, Vikram Mundkur,Brad Grehan and Tommy Tamand manages in excess of $4billion.

“Geoff’s research and port-folio management experienceand his acumen in Australianequities will be of value toGMO’s clients, and his leader-ship skills will be an asset toGMO’s management team,” saidGMO chief executive MarcMayer.

Wells has 20 years of expe-rience in the funds manage-ment industry. Prior to joiningGMO in 2008 he worked at Mac-quarie Investment Manage-ment for several years, most re-cently as a senior portfoliomanager. He previously workedat Bankers Trust Funds Man-agement as a portfolio man-ager and analyst. SR

Russell Investments hasappointed James Polis-son as managing direc-

tor of Russell’s global ex-change traded fund (ETF)business and Andrew Aren-berg as managing director ofglobal ETF distribution.

Both were previously in-strumental in building BGI’sglobal iShares business.They joined Russell in mid-January and will be based inSan Francisco.

Commenting on the ap-pointment, Polisson said: “Welook forward to focusing onnext-generation solutions forthe ETF industry with a mis-sion to complement what’scurrently available with new,innovative strategies. This isthe right time; Russell isuniquely positioned and I’mexcited to have this oppor-tunity to guide Russell’s glob-al ETF team.”

Polisson previously served

as BGI’s chief marketing of-ficer with responsibilities thatincluded BGI’s iShares globalbusiness. At BGI since 1998,he was head of global opera-tions risk management for twoyears before joining theiShares business.

Arenberg has worked as amanaging director in BGI’sglobal eBusiness, and heserved as managing directorof channel marketing for BGIfor six years. Prior to joiningBGI, he served on the corpo-rate strategy team and in theinstitutional business atCharles Schwab & Co.

Key Russell appointmentEvents Calendar

Super Review’s monthly diary of superannuation industry events around Australia and abroad.

MARCH

VICTORIA 10 – ASFA Luncheon. An (im)modest (un)popular proposal.

Speaker: Jack Gray. Venue: Park Hyatt Melbourne. 1 Parliament

Square (off Parliament Place), Melbourne. Enquiries: ASFA

Member Services Unit. Ph: (02) 9264 9300 or 1800 812 798.

QUEENSLAND 23 – ASFA Luncheon. Setting the (revamped) benchmark.

Speaker: Ross Clare, director – research and resource centre,

ASFA. Venue: Stamford Plaza. Corner of Edward and Margaret

Streets, Brisbane. Enquiries: ASFA Member Services Unit.

Ph: (02) 9264 9300 or 1800 812 798.

AUSTRALIAN CAPITAL TERRITORY 26 – ASFA Golf Day. Venue: Gold Creek Country Club. 50

Curran Drive, Nicholls. Enquiries: ASFA Member Services Unit.

Ph: (02) 9264 9300 or 1800 812 798.

SOUTH AUSTRALIA 29 – ASFA Golf Day. Venue: Kooyonga Golf Club. May Terrace

Lockleys, Adelaide. Enquiries: ASFA Member Services Unit.

Ph: (02) 9264 9300 or 1800 812 798.

30 - ASFA Luncheon. Tackling Risk. Speaker: Martin Littler,

head of core Australian equities, Colonial First State Global

Asset Management. Venue: Ayers House Restaurant. 288 North

Terrace, Adelaide. Enquiries: ASFA Member Services Unit.

Ph: (02) 9264 9300 or 1800 812 798.

NEW SOUTH WALES 16 - FINSIA Seminar. Re-engaging with super fund members.

Venue: Clayton Utz, Level 341, O’Connell Street, Sydney.

30 – ASFA Luncheon. Super – too much risk and not enough

lycra. Speaker: Darren Wickham, principal, risk and finance

practice, Mercer. Venue: The Westin Hotel. Ballroom, Lower

Ground Floor. No. 1 Martin Place, Sydney. Enquiries: ASFA

Member Services Unit. Ph: (02) 9264 9300 or 1800 812 798.

New managers of global exchange

traded funds business named.

Fax details of conferences, seminars and courses to Super Review on (02) 9422 2822

ROLLOVER T H E O T H E R S I D E O F S U P E R A N N U A T I O N

Battlelines drawn

THERE is an old saying – sometimes ascribed to for-mer Prime Minister and Treasurer Paul Keating – thatthe best sort of interest is self-interest, and it seems toRollover that David Whiteley of the Industry Super Net-work (ISN) would readily agree.

How else does one explain the ISN’s latest submis-sion to the Cooper Review in which it suggests the im-plementation of a so-called “super safety net”, whichwould see even more money rolling into the coffersof the industry superannuation funds, particularly thoselucky enough to be named as default funds underthe modern award process.

In the words of Whiteley: “”Where there is a fail-ure of consumer sovereignty, it is appropriate theregulatory framework steps in and protects the best in-terests of fund members. The super safety net protectsfund members’ stake in the super system while en-couraging members to seek impartial financial advicefrom their super fund, and enables more active mem-bers to make choices.”

Rollover wonders whether the trustees of fundsnot benefiting from the modern award process wouldentirely agree. SR

WHAT does Federal Liberal OppositionLeader Tony Abbott have in common withformer Federal Labor Opposition LeaderMark Latham?

Well, pugilistic abilities aside, both menhave written political tracts the contentsof which have served to haunt them asthey reach for higher political office.

The former Howard Government mademuch of the political and social com-mentary contained in Latham’s writingsand the Rudd Government’s Minister forFinancial Services, Superannuation and

Corporate Law, Chris Bowen, has nowseen fit to point the finger at Abbott.

Bowen referred to Abbott’s recently-published book, Battlelines, to suggest toa recent conference that bipartisanshipno longer exists on superannuation be-cause the opposition leader has suggest-ed encouraging people to save through su-perannuation may prove too expensive.

Rollover will now buy a copy of Bat-tlelines in the sure and certain knowl-edge that it will again be used in thesuper debate. SR

ROLLOVER has never been a bigfan of public relations (PR) prac-titioners, regarding them as roadbumps rather than facilitators.

Thus, as Rollover sat down toan ample meal with a certainfunds manager he was bemusedto receive a call from a PR op-erative offering to put him in

touch with the aforementionedfunds manager.

Not wishing to give offence,Rollover thanked the PR oper-ative for her call and pointedout that he believed he couldmanage his relationship withthe fund manager without theassistance of a third party.

Rollover thought it best notto mention the call to his gen-erous host but is still wonder-ing whether the PR companywill invoice for the ‘media con-tact’ and how it will justify theexercise.

But who is Rollover to standin the way of commerce? SR

Two’s company – three’s a crowd

Helping youto help me

ROLLOVER aside, there are few more ardent golfersin the financial services industry than Mercer’sRussell Mason.

Such is Mason’s love of the fairways that hehas played virtually all the major layouts in andaround Sydney, with the exception being ‘The Coast’at Little Bay – a close neighbour of St Michaelsand, of course, New South Wales.

It may have been his first outing at The Coast,but Mason and his wife made a formidable two-manAmbrose team, albeit the great man found it hardto get his driver working off the tee. Thus, when

he came to one of most picturesque and formi-dable holes on the course, Rollover thought it wasonly fitting that Mason have his photograph takenso that he could remember where his ball landed.

Readers of Super Review will be unsurprisedto know that Mason’s drive landed somewhat shortof the fairway and was last seen bouncing multi-ple times before coming to rest in the waters thatmake up the Tasman Sea.

Rollover’s ball similarly found the Tasman, butdid so without a single bounce. Mrs Mason – akaRos Lyon – saved the day with a par. SR


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super review magazine - march 2010

Documents

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