Lifecycle strategies now mainstream: Research

Lifecycle strategies hold 40% of MySuper's total $756 billion of assets and are becoming mainstream for superannuation funds, according to new Rainmaker research.

Lifecycle MySuper total assets grew 21% in the year to June end, to hit $299 billion.

In the same period, single strategy MySuper total assets grew by 6%, taking it to $457 billion.

"The total number of single strategy MySuper products went down to 57 in the five years to end of June 2019. However, lifecycle MySuper products grew from 21 to 26 during the same period indicating the growing popularity of lifecycle strategies," Rainmaker senior analyst Pooja Antil said.

In terms of performance, lifecycle MySuper outperformed single strategy for younger age groups.

"The lifecycle age cohort indexes marginally outperformed the single strategy index over three years in all age cohorts below 49 years, meaning younger age group. But they underperformed the single strategy index in older age cohorts," Antil said.

Australia now has $2.9 trillion in total superannuation assets, as at June end. Of this, $756 billion is held in default products. Retail funds have a 16% share of MySuper's total assets, with the majority in not for profit funds.

"[Total superannuation assets] were up 6.2% through the year. MySuper is thus growing twice as fast as the overall superannuation sector," she said.

Read more: MySuperRainmaker ResearchPooja Antil
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