Australian share market climbs 50 per cent in nine months!

The Australian share market has almost returned to where it was fourteen months ago just before it went into free-fall. In fact, since March 2009 the All Ordinaries has risen about 50 per cent and is edging closer to the 4700 mark.

legalsuper performance update

Returns for all legalsuper investment options to 30 November 2009.

New investment manager line-up

legalsuper has completed a review of its investment manager line-up, following the two recent mergers into legalsuper.

Fees reduced for most investment options

In July this year we announced reductions to most of our investment fees (between 0.03% and 0.05%) following changes in our investment manager line-up.

legalsuper calls for mandated performance benchmarks for super funds

legalsuper has called for closer scrutiny of under-performing super funds in its submission to the Cooper Review of the superannuation industry (initiated by the Federal Government).

Member survey findings – and prize winners

In October 2009 we issued our third periodic member survey, offering participants a chance to win one of three $100 book vouchers.

Pay for financial advice from your super

legalsuper members can access fee-for-service financial advice via Industry Funds Financial Planning (IFFP). And, the fees for advice about your super can be reimbursed from your super account rather than you paying for it out of your hip pocket.

Australian share market climbs 50 per cent in nine months!

The Australian share market has almost returned to where it was fourteen months ago just before it went into free-fall. In fact, since March 2009 the All Ordinaries has risen about 50 per cent and is edging closer to the 4700 mark.

All Ordinaries Index - 01/07/08 to 16/12/09

This dramatic turnaround shows the upside of share market fluctuations.

For most investors, super is a 40 year investment that is well placed to ride out both the ups and downs of investment markets. By far the majority of legalsuper members took a long term view during the down-turn period. Few switched investment options, thereby avoiding a potential loss from mis-timing the market rebound.

legalsuper performance update

Returns for all legalsuper investment options to 30 November 2009 are listed below. 

The above returns reflect the prevailing crediting rates at the time of writing and include interim rates for November 2009. Crediting rates change as updated information on investments comes to hand.

Note: Cash and Balanced options were launched on 1 July 2008.
Australian Equities, Overseas Equities and Socially Responsible options were launched on 1 October 2005.

Our new investment manager line-up

Following the recent mergers that incorporated two other funds, legalsuper has completed a review of its investment manager line-up.

The objectives of this review were to:

• critique and rationalise the Fund's manager line-up
• identify investment opportunities to better position the interests of our members.

Our investment committee received numerous presentations from existing and potential investment managers, and considered the advice of our asset consultant, JANA Investment Advisers in determining refinements to legalsuper's manager line-up.

New investment managers and their respective investment mandates include:

• Platinum Asset Management. ($22M in overseas equities). Platinum manages in excess of $15 billion.
• Invesco ($25M in small caps). Invesco is one of the world’s largest independent investment managers and globally manages more than $532 billion.
• Solaris ($67M in Australian equities). Solaris is a style neutral Australian equities boutique manager (this means Solaris doesn't have a bias towards value or growth stocks).
• Colonial ($35M in global credit). Colonial manages in excess of $25 billion in credit.
• Fauchier Partners ($20M in alternative assets). Fauchier Partners manages a diversified portfolio of hedge funds and manages $US6.6B.
• Alliance Bernstein ($22M in overseas equities in its ‘Value’ fund). Alliance Bernstein manages more than $447 billion across more than 45 countries.

A number of investment managers were terminated, including:

• Australian equities: Colonial First State, Contango, Challenger, Maple Brown Abbott, State Street Global Advisers and Wallara.
• Australian micro cap equities: Schroders.
• Overseas equities: Alliance Bernstein (‘Style Blend’ fund) and Concord.
• Australian fixed interest: Aberdeen (formerly Credit Suisse).

Part of the proceeds from the terminations was invested with existing investment managers including Australian equity managers (Balanced Equity Management and Integrity) and overseas equity managers (Capital and Marathon).

Fees reduced for most investment options

In July this year we announced reductions to most of our investment fees (of between 0.03% and 0.05%) following changes in our investment manager line-up.

Following more refinements to the investment manager line up, while keeping increases to a minimum, we are pleased to now announce further fee reductions.

Investment management fees are deducted from legalsuper’s investment earnings before interest rates (crediting rates) are declared each month. The old and new investment fees are shown below. Those options with investment fee reductions are shaded and marked with an '*'.

By way of comparison, the investment fees for the applicable ‘default’ investment option of a sample of super funds are listed below from lowest to highest.

1. SunSuper: 0.62%
2. legalsuper (Moderate option): 0.64%
3. AMP (Flexible Lifetime – Super Easy): 0.65%
4. MTAA Super: 0.69%
5. CareSuper: 0.70%
6. Hostplus: 0.73%
7. Health Super: 0.69%
8. Australian Super: 0.84%
9. HESTA: 0.86%

Please note that the investment fees for the above funds were sourced from their Product Disclosure Statements as available from their respective websites at the time of writing.

legalsuper calls for mandated performance benchmarks for super funds

legalsuper has called for closer scrutiny of under-performing super funds in its submission to the Cooper Review of the superannuation industry.

The three-phase review, announced in May 2009, is examining the governance, efficiency, structure and operation of Australia’s superannuation system.

In our submission, legalsuper calls for mandated minimum performance benchmarks in governance, costs and investment performance. Those funds that are below the benchmarks would receive closer attention from the regulator (Australian Prudential Regulation Authority) and be asked to justify their ongoing role in the industry.

This review is a unique opportunity to have input into the future of superannuation industry and ways that we can improve the retirement savings of our members.

Click here to download a copy of our submission.

Member survey findings – and prize winners

In October 2009 legalsuper issued our third periodic member survey, offering participants a chance to win one of three $100 book vouchers.

These surveys provide valuable insights into your views on different superannuation issues and importantly provide you an opportunity to give feedback on our performance, products and services.

A pleasingly high, 1,500 members from across our membership - including barristers, solicitors, practice management and support staff responded to the October survey.

Congratulations to the three winners - each receive a $100 book voucher.

• J.Huinink
• K.Sorrell
• I.Frost

Key survey findings

• How often do you check your balance? – Most respondents check their investment performance at least once a year (almost two thirds). The remaining one third checks it more frequently.
• Do you have a long-term view of super? – Most members judge the performance of their fund over a period of more than one year. 46 per cent of respondents evaluate it over one to three years and 35 per cent over five to ten years. Just 19 per cent judge a fund on its one year performance.
• What factors are important when choosing a super fund? - The two most important factors when choosing a fund are low fees (85% say it is very important) and strong investment performance (75% say it is very important). Ratings from rating agencies were rated as ‘less important’ (only one in five believes that ratings are ‘very important’).
• Your feedback on legalsuper’s 2008/09 investment performance - Feedback from 64 per cent of survey respondents was neutral, while 20 per cent responded positively and 16 per cent were negative. Whilst some members were understandably disappointed by the negative investment reuturns of super funds last year, many believe that legalsuper performed well compared to other funds given the difficult climate. Many also gave high ratings to the quality of information in the Fund's member statements and newsletters. 

Pay for financial advice from your super

legalsuper members can access fee-for-service financial advice via Industry Funds Financial Planning (IFFP). And any fees charged by IFPP for advice about your super can be reimbursed from your super account rather than you paying for it out of your hip pocket.

IFFP financial planners can provide personalised advice on super, weath creation, pre-retirement planning, and insurance needs. They do not accpt commissions, either upfront or ongoing, so more of your money keeps on working for you.

To register for an initial 1-hour appointment with IFFP, for no charge, email Chrissie Heyn on cheyn@legalsuper.com.au or call her on (03) 9607 9430.