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Mar 25

APRA Releases June 09 Super Performance

APRA yesterday released their June 2009 performance analysis of super funds and no surprises to see the Industry Super Fund MTAA at the bottom of the pile. with a return of -23.3%. MTAA was the previous number one fund over numerous years but with significant exposure to unlisted asset classes of private equity, property, and infrastructure its true risk has finally surfaced.

Unfortunately liquidity risk is often the forgotten risk and over the last few year many investors have suffered immensely because of it. MTAA achieved very high returns over a long period of time and unfortunately most observers attributed that high performance to skill. Wrong. The reason for their high performance is that they took on high risk and a substantial part of that high risk came in the form of illiquidity and over the 2008-09 financial year MTAA’s risky investment strategy was exposed.

I’m sure I sound like a broken record but the cliche lives on… noone receives high returns without accepting high risk. Understanding which risks you are prepared to accept and have accepted are two of the most important questions to answer in the investment decision.

To see the APRA report please click here.

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