Australian Superannuation (Pension) Fund Product Ratings and Performance: A Guide for Fund Managers

Posted: 4 May 2016

See all articles by John R. Watson

John R. Watson

Monash University - Department of Accounting

James Delaney

Tribeca Investment Partners

Michael J. Dempsey

Ton Duc Thang University (TDTU)

J. Wickramanayake

Monash University - Department of Accounting; Financial Research Network (FIRN)

Date Written: May 1, 2016

Abstract

This paper investigates the ability of Morningstar superannuation fund ratings to predict future performance in the context of the Australian superannuation fund industry. In this context, we make provisions for fund size and fund age. We draw three broad conclusions. First, fund ratings can assist in predicting funds that are likely to significantly under perform in subsequent periods. Second, the ratings are mostly unable to distinguish between highly and moderately performing funds. Third, the likelihood of a fund being highly rated is negatively related to the size of assets under management and positively related to its age. Accordingly, the paper should be of benefit not only to fund managers seeking to identify under performing funds, but also to fund advisers, retail investors, and trustee boards choosing SF products for investment choice menus.

Keywords: Morningstar Ratings, Performance, Superannuation Funds

Suggested Citation

Watson, John R. and Delaney, James and Dempsey, Michael J. and Wickramanayake, Jayasinghe, Australian Superannuation (Pension) Fund Product Ratings and Performance: A Guide for Fund Managers (May 1, 2016). Australian Journal of Management, Vol. 41, No. 2, 2016, Available at SSRN: https://ssrn.com/abstract=2774329

John R. Watson (Contact Author)

Monash University - Department of Accounting ( email )

Building 11E
Clayton, Victoria 3800
Australia

James Delaney

Tribeca Investment Partners ( email )

1 O’Connell Street
Level 23
Sydney, NSW
Australia

Michael J. Dempsey

Ton Duc Thang University (TDTU) ( email )

District 7
Ho Chi Minh City, 3001
Vietnam

Jayasinghe Wickramanayake

Monash University - Department of Accounting ( email )

Building 11E
Clayton, Victoria 3800
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

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