Effect of Fund Size on the Performance of Australian Superannuation Funds
James Richard Cummings
Macquarie University, Faculty of Business and Economics
Australian Prudential Regulation Authority Working Paper
This paper finds that fund size has a positive impact on the performance of not-for-profit superannuation funds, which is evident both in gross returns and in expenses. Larger not-for-profit funds have higher allocations to investments, such as private equity and real estate, where they are likely to have a size-related advantage. Lower investment expense ratios of larger not-for-profit funds suggest that they negotiate more favourable fee schedules with external managers. Larger not-for-profit funds realise substantial operational cost savings. However, fund size does not have a positive impact on the performance of retail superannuation funds.
Number of Pages in PDF File: 36
Keywords: retirement savings, pension funds, investment management, economies of scale
JEL Classification: G11, G23, L25working papers series
Date posted: March 28, 2012 ; Last revised: December 28, 2012
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