Multi- Asset Group Chief Investment Officer
As an industry, we’re blinkered by performance figures. One of the prevalent measures of success in our industry today is performance in relative terms, i.e. against a peer group or a benchmark. This can provide fiduciaries or advisers with important information about the success of manager selection or the management of business risk. However, it provides no information to the customer about whether their retirement strategy is on track. What does it mean to a customer if a fund is a ‘second-quartile performer’? This is partly why engagement with superannuation is low industry-wide.
Of course it’s critical that a fund performs well over one, three, five and ten years. However, it’s just as important to look forward and consider whether a fund will deliver a suitable level of income at the end of a customer’s working life. This is ultimately what customers are concerned with and they are much more likely to be engaged with a fund, such as a goals-based investing or lifecycle fund, which focus on specific outcomes. Lifecycle funds and goals-based investing solutions create a much better platform for investor engagement, and help ensure investors stay on track to meet their goals.
Important note: While every care has been taken in the preparation of this article, AMP Capital Investors Limited (ABN 59 001 777 591, AFSL 232497) and AMP Capital Funds Management Limited (ABN 15 159 557 721, AFSL 426455) makes no representations or warranties as to the accuracy or completeness of any statement in it including, without limitation, any forecasts. Past performance is not a reliable indicator of future performance. This article has been prepared for the purpose of providing general information, without taking account of any particular investor’s objectives, financial situation or needs. An investor should, before making any investment decisions, consider the appropriateness of the information in this article, and seek professional advice, having regard to the investor’s objectives, financial situation and needs. This article is solely for the use of the party to whom it is provided.