Perspectives

Building a Superannuation Reference Portfolio
31 May 2014
Aongus O'Gorman

Introduction

Round Tower has constructed an investment portfolio representative of the typical allocations made by default superannuation funds in Australia, considering both contemporary and historic allocations.

With similar return targets and investment philosophies, superannuation funds have typically allocated significant portions of their portfolios to Australian and international equities, with smaller allocations to fixed income, property, and cash. Round Tower calculates the returns of these investment decisions each month, and has developed a 20-year history of performance.

The Index uses broad assumptions to generate after fee, after tax outcomes. It assumes passive exposure to markets and monthly rebalancing to target allocations. As such, superannuation funds with alternative investment philosophies, dynamic asset allocation processes, strong levels of active management, and / or after-tax-management strategies should be expected to outperform the index over time on either a total return, or risk-adjusted basis.

This perspective introduces the Round Tower Super Index, which we intend to be used as a tool for performance measurement (and debate) within the industry.

Please contact us if you would like a copy of this Perspective.



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