SEARCH

Future Fund criticises 'outdated' investment tech

Future Fund criticises 'outdated' investment tech
There is "very little innovation" in the way institutional investors construct portfolios, argues the Future Fund's managing director.
Future Fund managing director David Neal called on super funds to become "braver and more courageous" at the Association of Superannuation Funds of Australia (ASFA) Investment Interchange in Sydney yesterday.
"The technology we're using to turn savings into investment return is pretty outdated.
"We're still doing things pretty largely the same way we were doing them a pretty long time ago," Mr Neal said.
With the exception of 'target date' funds, there has been very little innovation in the way super funds build portfolios, he said - although he acknowledged it is "starting now".
"Personally, I think [the problem] is the governance of institutional funds. It just needs to get better and become more expert, braver and more courageous," Mr Neal said.
The Future Fund boss also admitted to being "puzzled" about the 'peer group' mentality of institutional investors in Australia given superannuation members are typically unengaged and do not switch funds.
"If nobody switches, what are you worried about?" he asked.
Mr Neal also gave some insight into the interaction between the Future Fund investment committee and the fund's board.
Asked how the $116 billion Future Fund avoids the problem of 'silos', Mr Neal said it starts with the board - with only one of the directors having been on a super fund board before.
"The rest are all successful corporate people and they didn't really have a 'this is the way it's done' [attitude]," he said.
According to Mr Neal, when the Future Fund was founded in 2006 and the investment committee began discussing possible investment constraints, the board responded by saying: "Why put any on yourself?"
As a result, the Future Fund's performance is not measured by a benchmark, he said - although the investment committee must report to the board monthly.
"That means if we're doing a bad job [the board] know we're doing a bad job," Mr Neal said.
"[The absence of a] benchmark just completely frees us up to go and build the right portfolio, and explain to the board why it's the right portfolio," he said.
To read the original article and for more financial services news click here.
Subscribe to our Newsletter
We Translate Complicated Financial Jargon Into Easy-To-Understand Information For Australians
Your email address will be shared with nestegg and subject to our Privacy Policy
latest articles
OUR PLATFORMS AND BRANDS
- Accountants Daily
- Accounting Times
- Adviser Innovation
- Australian Aviation
- Broker Daily
- Cyber Daily
- Defence Connect
- Fintech Business
- HR Leader
- Independent Financial Adviser
- Investment Centre
- Investor Daily
- Lawyers Weekly
- Money Management
- Nestegg
- Property Buzz
- Real Estate Business
- Smart Property Investment
- SMSF Adviser
- Space Connect
- Super Review
- The Adviser
- Wellness Daily
- World of Aviation
EVENTS AND SUMMITS
- ACE25 The Accounting Conference and Exhibition
- Adviser Innovation Summit
- Australian Accounting Awards
- Australian AI Awards
- Australian Aviation Awards
- Australian Aviation Summit
- Australian Broking Awards
- Australian Cyber Awards
- Australian Cyber Summit
- Australian Defence Industry Awards
- Australian Law Awards
- Australian Law Forum
- Australian Space Awards
- Australian Space Summit
- Australian Wealth Management Awards
- Australian Wealth Management Summit
- Better Business Awards
- Better Business Summit
- Broker Innovation Awards
- Broker Innovation Summit
- Budget Summit
- Commerical Finance Awards
- Corporate Counsel Summit
- Defence & National Security Workforce Awards
- Fund Manager of the Year Awards
- ifa Excellence Awards
- Lawyers Weekly 30 Under 30 Awards
- New Broker Academy
- Partner of the Year Awards
- Partner Summit
- REB Awards
- Rising Star Awards
- SME Bootcamp
- SMSF Technical Strategy Day
- Super Fund of the Year Awards
- Women in Finance Awards
- Women in Finance Summit
- Women in Law Awards
- Women in Law Forum
LEARNING AND EDUCATION
MOMENTUM MARKETS NETWORK
LINKS
STAY CONNECTED
Subscribe to the Adviser Innovation eNewsletter.
OUR PLATFORMS AND BRANDS
- Accountants Daily
- Accounting Times
- Adviser Innovation
- Australian Aviation
- Broker Daily
- Cyber Daily
- Defence Connect
- Fintech Business
- HR Leader
- Independent Financial Adviser
- Investment Centre
- Investor Daily
- Lawyers Weekly
- Money Management
- Nestegg
- Property Buzz
- Real Estate Business
- Smart Property Investment
- SMSF Adviser
- Space Connect
- Super Review
- The Adviser
- Wellness Daily
- World of Aviation
EVENTS AND SUMMITS
- ACE25 The Accounting Conference and Exhibition
- Adviser Innovation Summit
- Australian Accounting Awards
- Australian AI Awards
- Australian Aviation Awards
- Australian Aviation Summit
- Australian Broking Awards
- Australian Cyber Awards
- Australian Cyber Summit
- Australian Defence Industry Awards
- Australian Law Awards
- Australian Law Forum
- Australian Space Awards
- Australian Space Summit
- Australian Wealth Management Awards
- Australian Wealth Management Summit
- Better Business Awards
- Better Business Summit
- Broker Innovation Awards
- Broker Innovation Summit
- Budget Summit
- Commerical Finance Awards
- Corporate Counsel Summit
- Defence & National Security Workforce Awards
- Fund Manager of the Year Awards
- ifa Excellence Awards
- Lawyers Weekly 30 Under 30 Awards
- New Broker Academy
- Partner of the Year Awards
- Partner Summit
- REB Awards
- Rising Star Awards
- SME Bootcamp
- SMSF Technical Strategy Day
- Super Fund of the Year Awards
- Women in Finance Awards
- Women in Finance Summit
- Women in Law Awards
- Women in Law Forum
PODCASTS
- Accountants Daily Podcast Network
- Australian Aviation Podcast Network
- Broker Daily Podcast Network
- Defence Connect Podcast Network
- HR Leader Podcast Network
- REB Podcast Network
- Relative Return
- Space Connect Podcast
- The Adviser Podcast Network
- The ifa Show
- The Lawyers Weekly Show
- The Smart Property Investment Show