If you’re one of the 15 million or so Australians with retirement savings stashed away in a big superannuation fund, you can tuck into your Easter eggs this weekend knowing your fund should not perform much worse than others, even in these volatile markets.
That’s good. But what about materially outperforming others? What about backing Australia’s next big thing; something that could create 20,000 jobs, pay $500 million tax a year and be worth $20 billion one day? What about getting maximum bang for your supposedly long-term investment horizon?
Your super fund is probably nowhere close to that next big thing. The funds are too big and too scared of underperformance, and also highly incentivised to put your monthly $1000 or $2000 contribution into index funds or Commonwealth Bank and BHP shares, knowing others are doing the same.
But what is CBA or BHP doing with that extra funding? They’re already big, well-funded, good employers and taxpayers, and they’re also now subject to the same conservative super fund investors who would prefer a steady few-per-cent-a-year earnings growth over any dramatic reinvestment. CBA, indisputably our best bank and banking’s top capital allocator, hasn’t made a big strategic shift or risky bet in years.
What we’re left with is a stagnant Australia – stagnant industries, stagnant investment, stagnant returns and an overall stagnant economy. We sleep easier at night but risk sleepwalking into our own mediocre future.
Source: https://www.afr.com/chanticleer/the-high-cost-of-your-super-fund-s-safety-first-mentality-20260401-p5zkhz