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Institutional Homogeneity and Choice in Superannuation

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  • Adam Clements

    ()
    (QUT)

  • Michael E. Drew

Abstract

In this analysis of institutional investor performance, two questions are addressed. First, what degree of similarity is observed within the market place for retail superannuation funds? Second, what are the implications of homogenous behaviour for member choice policy? The answers from this study are as follows: as an industry, institutional investors destroyed value for superannuation investors for the period 1991 through 2003, under-performing passive portfolio returns by around 60 basis points per annum. Moreover, we find there is a great deal of clustering around this average underperformance. It also appears as though funds have similar risk characteristics which are, on average, defensive. The findings suggest that the products offered by those competing in this market are very similar in nature, hence limiting the potency of choice policy in Australia.

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File URL: http://external-apps.qut.edu.au/business/documents/discussionPapers/2007/TP%20Final%20218.pdf
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Bibliographic Info

Paper provided by School of Economics and Finance, Queensland University of Technology in its series School of Economics and Finance Discussion Papers and Working Papers Series with number 218.

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Length: 23
Date of creation: 01 Jun 2007
Date of revision:
Handle: RePEc:qut:dpaper:218

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Web page: http://www.bus.qut.edu.au/faculty/economics/
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Related research

Keywords: Superannuation; underperformance;

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