For some idiotic reason I wanted to find out the trajectory of funds under management within the superannuation industry. You would think that data that had such national significance would be easy to find….guess again.
To get some inkling of the way funds under management had been growing in the past decade I had to use some extensive google-fu to find various bits and pieces from APRA and Austrade. Using this data I cobbled together the chart below (empahsis on the word cobbled)
As you can see the growth has been fairly constant with a sizeable dip caused by the GFC because apparently your highly paid fund manager had never heard of a stop loss.
As interesting as this data is the real reason I wanted to get a sense of the growth in funds under management was to get an idea of the income stream generated by the industry. Once you know the size of funds under management working out the incomes stream is easy because generally managers charge a fixed percentage fee.
Assuming a conservative 1% management fee in the past 15 years managers have taken $103 billion in fees. In the past 10 years they have taken $83 billion. During the past 10 years APRA analysed the return of the 200 largest superannuation funds and found that the average return was 3.9%. Over the same period the overnight cash rate averaged 5%.
So for returning less than cash did managers took $83 billion out of the system.
I could be twice as incompetent for half the money.