AustralianSuper is closing three investment options and replacing them with two as part of a streamlining process aiming to keep costs low and refocus the fund's investment efforts.
The industry super fund will close its Australian Fixed Interest, International Fixed Interest and International Shares (Hedged) investment options on 28 January 2016.
The two fixed interest options will be replaced by the Diversified Fixed Interest option which invests in a broader range of securities and strategies across Australian and international securities and includes government bonds, non-government bonds and high-yield loans. It is mostly hedged in to Australian dollars to reduce the impact of currency movements.
The International Shares option keeps the same investment portfolio but without currency hedging.
Australia's largest super fund says its International Shares option has benefited from the Australian dollar falling since 2011. It says the fall has been driven in part by the decline in the prices of key commodities along with lower interest rates and a more subdues growth outlook for the global economy.
The new investment options are the most popular in their class and AustralianSuper says they have performed as well or better than the closing options over the medium to long term, and after costs.
In 2014-15, investment costs for the Diversified Fixed Interest option were slightly higher than the Australian and international options. For superannuation investments the diversified option returned 5.96% over the year, higher than the Australian (4.17%) and international (3.99%) options.
Investment costs for International Shares were slightly lower than the hedged option. For super investments the unhedged option returned 22.92% over the year, compared with 9.94% for the hedged option.
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