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Australian Food Super closes failed investment option

Australian Food Super, previously known as the Australian Meat Industry Superannuation Trust, is closing its Shares product, which failed last year's Your Future, Your Super test.

Effective May 27, Australian Food Super is terminating the Shares option and opening two separate, single class options - Australian Shares and International Shares.

The current Shares option is a split asset class investment option, 50% of which is invested in Australian equities while the other 50% is in global shares.

Australian Food Super said it is making the change as it believes "this is a simplified approach, so members can understand exactly what they are invested in."

"This change also gives members the ability to select a greater or lesser exposure to either international or Australian share markets if they desire it," the fund said.

The fund's Shares option was one of 20 non-platform trustee directed investment options to fail last year's performance test; it was one of only two options from industry funds to fail and was known as the High Growth option for much of the relevant period.

At the end of December 2022, prior to the performance test result, the option had 910 member accounts invested and about $58.8 million in funds under management (FUM). At the end of 2023, following the result, there was 740 members invested and about $52.8 million in FUM, according to APRA data.

Interestingly, the option has had the fund's highest return for the year to March 2024 end, coming in at 14.12%.

For members in the option, their investment will be transferred and split evenly across the two new options.

The new Australian Shares option has a target return of inflation plus 5% over rolling 10-year periods and is considered very high risk, with an estimated probability of a negative return of 6.6 out of every 20 years.

Meantime, the International Shares option has the same return target and is also considered very high risk, with the estimated probability of a negative return in 6.3 of every 20 years.

In October last year, Australian Meat Industry Superannuation Trust - also known as AMIST Super - decided to rebrand as Australian Food Super in a bid to expand its membership beyond the meat industry.

The fund has about 65,000 members and some $3 billion in assets.

Read more: Australian Food SuperAustralian Meat Industry Superannuation TrustAustralian SharesInternational SharesAMIST SuperAPRA