School of Economics and Finance, Queensland University of Technology, Queensland 4001 Australia. Corresponding author: Basu, email < email@example.com>.
Asset Allocation Policy, Returns and Expenses of Superannuation Funds: Recent Evidence Based on Default Options
Version of Record online: 26 FEB 2014
© 2014 The University of Melbourne, Melbourne Institute of Applied Economic and Social Research
Australian Economic Review
Volume 47, Issue 1, pages 63–77, March 2014
How to Cite
Basu, A. and Andrews, S. (2014), Asset Allocation Policy, Returns and Expenses of Superannuation Funds: Recent Evidence Based on Default Options. Australian Economic Review, 47: 63–77. doi: 10.1111/1467-8462.12040
- Issue online: 26 FEB 2014
- Version of Record online: 26 FEB 2014
- Manuscript Accepted: 3 JUL 2013
- Manuscript Received: 1 DEC 2012
We examine the asset allocation, returns and expenses of superannuation funds whose assets are mainly invested in default investment options. A majority of these funds fail to earn returns commensurate with their asset allocation policy. It appears that much of the variation in returns between these funds is a result of engaging in significant active management of assets. Our results indicate that the returns from active management of retail funds are negatively related to expenses, whereas the relationship is positive for industry funds. We also find strong evidence of economies of scale existing in superannuation funds across different size categories.