What does Stronger Super mean for CFO s. Michael Mulholland EGM, Growth & Advice, Sunsuper

Transcription

1 What does Stronger Super mean for CFO s Michael Mulholland EGM, Growth & Advice, Sunsuper

2 Before we begin This presentation contains general advice and does not take into account the investment objectives, financial situation or needs of any particular individual. You should consider the appropriateness of the advice, having regard to your own particular objectives, financial situation and needs before acting on any advice. You need to apply the concepts to your own situation before making an investment decision. You should obtain and consider a copy of the Product Disclosure Statement (PDS) before making a decision to acquire, or continue to hold the product. You can obtain a PDS by calling Sunsuper on or by visiting sunsuper.com.au Representatives are employees of the Sunsuper Group and act as representatives of Sunsuper Financial Services Pty Ltd (ABN AFSL No ), a wholly owned subsidiary of Sunsuper Pty Ltd (ABN AFSL No ). As employees of Sunsuper, we may recommend Sunsuper superannuation products where they are appropriate. We are remunerated by salary package, a portion of which is payable on achievement of key performance indicators. Further information is available in the Financial Services Guides for Sunsuper and Sunsuper Financial Services.

3 What I ll be discussing today A changing industry MySuper consider the cost Are you ready for SuperStream

4

5 Forces driving industry change Competition Government Technology

6 price Accrued default amounts 200bps Members penalised until bps 80bps 95% 5% 100% Original default balance MySuper new contributions Sunsuper MySuper

7 Sources: news.com.au; Investor Daily; Money Management; finsia.com

8 price Sustainable pricing >130bps Flipping on exit 100bps 80bps MySuper Corporate MySuper default MySuper Corporate MySuper default Sunsuper

9 Beyond MySuper Your SuperStream obligations Provide minimum data Make Payments Provide any missing information Required in electronic format Must be made electronically Must be provided within 10 days

10 Are you ready? Know your timeframe

11 Consider your options Do it yourself Use a provider Using a software solution Using a provider, like Sunsuper

12 Leading Employer Online facility

13 Leading customer service Member Standard 2013/14 actual New members 95% within 3days 96% Contributions 95% within 2 days 98% Benefit payments Annual review 95% within 3 days 96% Within 30 days of complete data 100% Employer Ran k Fund NPS Varianc e 1 Sunsuper - 2 HESTA Colonial First State Cbus Australian Super BT AMP CareSuper MTAA OnePath IOOF Source: Roy Morgan June 2014

14 Our focus for you Attract new employers & members Retain employers & members Generate economies of scale Delivered by a highly engaged team Low cost MySuper Long-term Outperformance Value-added services for members Value-added services for employers

15 Helping make super easy for you

16 Market Update David Hartley Chief Investment Officer, Sunsuper

17 Your investments at work Economic background Market update Challenges facing investors What is Sunsuper doing? Our performance Outlook

18 US money base

19 Market returns to 31 October 2014 Market Indicators FYTD (%p.a.) 1 Year (%p.a.) 3 year (%p.a.) 5 year (%p.a.) 10 year (%p.a.) Australian Shares ASX International Shares (MSCI hedged to $A) International Shares (MSCI $A unhedged) Emerging Markets Shares (MSCI EM $A unhedged) Listed Property ASX300 Prop Fixed Income UBS Comp Bond Cash UBSA Bank Bill

20 From the US Federal Reserve likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after our current asset purchase program ends. monetary policy is not on a preset path. The Committee will be closely monitoring incoming information on the labor market and inflation in determining the appropriate stance of monetary policy. Janet Yellen, US Federal Reserve Chairman 22 August 2014

21 Challenges for future returns Investors have become used to low interest rates Asset prices have risen Looking for support from economic recoveries Watch out for crunching of the gears

22 Easy money and future returns Return Normal Future returns expected to be lower Risk

23 Challenge: look outside the oval Return Risk

24 Looking outside the oval

25 A-Train AB (Arlanda Express) High speed rail service between Arlanda Airport and Stockholm Stable, mature asset operating in a strong economic environment Sunsuper has 25% direct ownership Forecast IRR of 12% p.a. Yield (10-year) 8.8%

26 Queensland Airports Ltd Sunsuper has ~$230m invested in QAL and has owned part of QAL since 1998 QAL owns and operates the airports in the Gold Coast, Townsville, Mt Isa and Longreach Investment capitalises on strong population growth in the Gold Coast and Townsville areas as well as Asian tourism

27 Discovery Holiday Parks Extended our investment in Discovery Holiday Parks Own 98% of the company on behalf of our members One of largest Australian park owners, over 30 parks Capitalises on grey nomad theme and need for mining parks High cash yields and underlying land value

28 E-commerce logistics Sunsuper has over $300m invested in industrial properties through property managers E-commerce is a strong growth driver as e-tailers need large warehouses and distribution centres

29 Private equity Approximately $1.6 billion invested in private capital Returns have been healthy 15.7% over year to June % p.a. since inception in 2003 (vs 9.7% p.a. for listed shares)

30 Distressed Debt Solid assets, too much debt Equity value wiped out Debt holders exercise rights to assets Company can then survive and prosper under new ownership

31 Super-savings account returns to 30 September Diversified options Conservative Retirement Balanced Growth yr % p.a. 3 yr % p.a. 5 yrs % p.a. 7 yrs % p.a. 10 yrs % p.a. Past performance is not a reliable indication of future performance.

32 Income account returns to 30 September Diversified options Conservative Retirement Balanced 6 Growth yr % p.a. 3 yr % p.a. 5 yrs % p.a. 7 yrs % p.a. 10 yrs % p.a. Past performance is not a reliable indication of future performance.

33 Balanced Option returns to 30 September 2014 Super-savings 14.00% 12.00% 10.00% 8.00% 6.00% Sunsuper Balanced Option SR50 Median 4.00% 2.00% 0.00% 1 year 3 yr pa 5 yr pa 7 yr pa 10 yr pa Source: SuperRatings Fund Crediting Rate Survey to 30 September Past performance is not a reliable indication of future performance.

34 Balanced Option v Master trusts Past performance is not a reliable indication of future performance.

35 Outlook Markets remain supported by low interest rates Economies are improving but challenges remain US has tapered its monetary easing but expects interest rates to remain low for a long time Still not many bargains in public markets but some opportunities are still attractive in private markets

36 Take-aways Markets remain tough There are no certainties Investors need to seek and invest in a range of opportunities to meet their objectives Need to apply critical assessment to opportunities Sunsuper is the place to look after your super

37 Q&A