Seven choice funds fail APRA performance test
The Australian Prudential Regulation Authority (APRA) has released its latest superannuation performance test data revealing problems for seven trustee-directed (choice) products.
As flagged, products from AMP and Insignia Financial were among those deemed to have failed the test.
APRA said that it assessed 563 products of which:
- 52 MySuper products, all of which passed the test (none failed in 2024)
- 374 non-platform trustee-directed products, all of which passed the test (none failed in 2024)
- 137 platform trustee-directed products1, of which seven failed the test (37 failed in 2024)
APRA deputy chair, Margaret Cole said that the regulator had noted that a small number of platform trustee-directed products had passed the test “partly because rebates were applied”.
“While this benefits members, APRA will engage with relevant trustees to reinforce the expectation of sustained performance improvement,” her statement said.
The failed products came from Bendigo Bank, Insignia Financial’s MLC and AMP’s MyNorth range of products, with a number being consecutive fails.
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The test methodology is absolutely rubbish. Of course products have to rebate when it is impossible to determine what the BRAFE is going to be.
Only Canberra could take a well-intended idea and turn it into an utterly idiotic calculation.
The test methodology needs to be reviewed immediately. We shouldn’t be reading articles about superannuation fund managers talking about herding just to avoid failing the test.
Unintended consequences from mis-allocated capital on this scale are enormous.
Again, only Canberra could devise such stupidity.
I wonder why CBA share price is has gone up 50% over the last 12 months and every investmetn say they can’t justify why the share price keeps going up it can’t have anything to do with hearding because of the performance test. I wouldn’t be suprised MPs will short the stock ahead of time when they know the performance test is about to change…..
The question that has to be asked is….
Is the fund manager buying the investment as they believe purchase price and potential value of the investment will benefit the clients retirement?
Or is the fund manager buying the investment at any price to ensure that they don’t fail some arbitrary short term test?
What a disgusting state of affairs.
To think that they want to expand this is insane.
One of the funds that failed the test appears to have a 1 year net return (after fees) of 10.71% (as at June 30, 2025) which was better than a lot of balanced options in the MySuper range at a lower risk point.
Absolute joke.
And what? I mean and so what?
What relevance is this test if the fund goes belly up the next day?