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Sunsuper's investment costs increase after strong returns

Media release - 10/05/2021

Sunsuper’s investment returns for 2020/21 have been very strong, resulting in an increase to the Fund’s performance-related costs within the Indirect Cost Ratio (ICR).

This year’s exceptionally strong return, net of investment fees and taxes, means Sunsuper has outperformed the industry average return. Sunsuper’s Balanced option returned 21.3% for the year to 31 March 2021, compared to the industry average of 19.3%*.

The ICR is not charged by Sunsuper or deducted directly from members’ accounts or unit prices. It is deducted from investment returns prior to the calculation of our daily unit prices.

The ICR performance-related costs are incurred in years where investment managers outperform their targets. For example, in 2019/20 Sunsuper paid almost no performance-related costs (within the ICR) to investment managers.

As a profit-for-members super fund committed to acting in the best financial interests of members, our selection of world-class investment managers has resulted in outperformance over the 2020/21 financial year to date.

Sunsuper’s one year return to 31 March 2021 of 21.3% p.a, translated to a growth of $10,650 in account balance (dollar-based investment increase) for a Sunsuper member with $50k invested in the Balanced option. The resulting ICR performance-related cost increase was $95.

Sunsuper’s base investment fees have remained stable since 1 July 2019. Performance-related fees that we pay our investment managers have also remained steady for the majority of options.

Sunsuper continues to be a top-10 performing fund across 1, 3, 5, 7 and 10 years, with our Balanced option outperforming the industry average over all time periods.

Sunsuper recently announced its intention to merge with QSuper to create a $200 billion superannuation fund with two million members opened to all Australians. The merger is planned to proceed in September 2021 and remains subject to a range of conditions, including regulatory and legislative, and final Board approvals.

*For the SuperRatings SR50 Balanced (60—76) Index which comprises the largest investment options with a similar asset allocation to growth-style assets of between 60-76%.