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Lifecycle now MySuper mainstream: Rainmaker

The share of funds under management held in lifecycle MySuper options has almost doubled in the last eight years as single strategy products drop off, but member balances at age 65 still don't quite stack up.

This is one of Rainmaker Information's latest findings, following an analysis of the $864 billion MySuper market. Comparing lifecycle and single strategy options, Rainmaker found they generally perform neck and neck but once a member turns 60, lifecycle's performance wanes.

The analysis shows by age 65 lifecycle members on average have an account balance that is 11% lower than single strategy members.

"It is only in the final few years before retirement that single strategy regains its edge, reflecting that, in retrospect, some lifecycle products perhaps derisk too quickly," Rainmaker said.

That said, it's half the differential the same comparison in 2019 found.

As of June 2021, there were 67 generic MySuper products on offer, 21 of which were lifecycle options totaling $316 billion in FUM.

About half of this FUM is owned by members in their 40s and 50s, 27% is held by those in their 20s and 30s, while those aged under 20 account for 10% and over-60s hold just 7%.

Members aged under 50 have about 85% of their retirement savings in growth assets, while the allocation for those in their 50s is about 67% and about 45% for over-70s.

The biggest lifecycle product as at June 2021 was Aware Super, followed by Sunsuper and QSuper. These, along with MLC, hold two thirds of the sector.

Read more: MySuperRainmaker Information