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Australia’s Retail Superannuation Fund Industry: Structure, Conduct and Performance

Author

Listed:
  • Adam Clements
  • Gemma Dale
  • Michael E. Drew

Abstract

In this analysis of Australia’s superannuation arrangements it is our conjecture that the structure and conduct of the retail superannuation industry in Australia directly impacts performance, resulting in the delivery of costly funds management products which add minimal value for investors over the long term. In this study, we take the perspective of an investor faced with selecting a retail superannuation fund, and explore the extent to which various differentiating characteristics (such as style, rating and cost) provide insights into fund quality which uses a variety of asset pricing models for the period 1991 through 2003. The results of this study, suggest that investors cannot garner superior risk-adjusted returns through reliance on such characteristics.

Suggested Citation

  • Adam Clements & Gemma Dale & Michael E. Drew, 2007. "Australia’s Retail Superannuation Fund Industry: Structure, Conduct and Performance," School of Economics and Finance Discussion Papers and Working Papers Series 217, School of Economics and Finance, Queensland University of Technology.
  • Handle: RePEc:qut:dpaper:217
    Note: Corresponding Author: Associate Professor Michael E. Drew, School of Economics and Finance, Queensland University of Technology, GPO Box 2434, Brisbane, Qld, 4000, Australia. Tel: +61-7-3138-1481; Fax: +61-7-3138-1500. Email: m.drew@qut.edu.au; Acknowledgements: Drew acknowledges the financial support of the Australian Research Council’s Discovery Project funding scheme (#DP0452336, “Modelling the Risk of Defined Contribution Superannuation Plans”). We thank Robert Bianchi, John Polichronis and Tim Robinson (QUT) for helpful comments. We thank participants at the 2005 ‘Mid-West Finance Conference’ (Milwaukee), the 2005 ‘Australia’s Superannuation System: Accounting, Accountability and Performance Symposium’ (Brisbane) and the 2005 ‘Australian Conference of Economists’ (Melbourne) for feedback and discussion. We gratefully acknowledge the comments from two anonymous referees which assisted in the development of the paper and the work of the managing editor, Associate Professor Nava Subramaniam. Any remaining errors are our own.
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    More about this item

    Keywords

    Superannuation funds; Australia; Performance evaluation;

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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