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Switching between superannuation funds: Does performance and marketing matter?

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  • Peng, Xiaowen
  • Alpert, Karen
  • Hsu, Grace Chia-Man

Abstract

This study examines the roles of fund performance and marketing in superannuation members' fund switching activity in Australia. Using member-nominated transfers from a unique data set of Australian Prudential Regulation Authority (APRA)-regulated superannuation funds from 2005 to 2014, our results indicate that members who switched funds do not chase after superior short-term returns but they do punish bad performers by withdrawing investments. We find a consistent positive relation between marketing effort and investor choice for retail funds, which engage in extensive marketing. However, marketing does not appear to be an effective strategy for industry-based funds to attract investments.

Suggested Citation

  • Peng, Xiaowen & Alpert, Karen & Hsu, Grace Chia-Man, 2020. "Switching between superannuation funds: Does performance and marketing matter?," Pacific-Basin Finance Journal, Elsevier, vol. 63(C).
    • Handle: RePEc:eee:pacfin:v:63:y:2020:i:c:s0927538x20302687
    DOI: 10.1016/j.pacfin.2020.101431
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    Cited by:

    1. Sarantis Tsiaplias & Qi Zeng & Guay C. Lim, 2023. "Retail Investor Trading Intentions: New Evidence from Australia," The Economic Record, The Economic Society of Australia, vol. 99(327), pages 512-535, December.

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    More about this item

    Keywords

    Superannuation; Retirement; Pension; Investment choice; Fund flow-performance; Individual investors;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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