Betashares

Superannuation fees can add up to a huge long-term expenditure, costing Australians with modest super balances thousands of dollars a year. But costs may start to fall, with some funds and new players working to disrupt the structure.

The value of Australian’s superannuation pool rose to a record high of $3.62 trillion in the June quarter, a highlight of the managed funds industry’s surging overall performance over the past year as rising rates and rebounding markets improved asset values.

The surge in passive investment options in recent years, along with a record of underperformance by active managers, has pushed the ongoing active-versus-passive debate to the fore. Proponents of both styles agree, though, that how each approach performs in volatility will be the key question in 2023.

The market for exchange-traded products posted 5 per cent year-over-year growth in March, while listed investment companies continued to see assets under management fall, new ASX data shows. As rising interest rates and cost-of-living bite, though, the trend has begun to slow, with investors seeking safety in defensive ETFs.

For those planning to invest in offshore assets, the decision whether to hedge currency exposure is an important one as movements in the Australian dollar can either erode or add value to an investment.

With economists expecting the Australian dollar to strengthen this year, investors are looking to currency-hedged funds to remove FX exposure that threatens to erode the value of their international investments.

Exchange-traded funds continued to attract inflows from investors in 2022, albeit at a slower pace thanks to rising interest rates and market volatility. Resources and mining-focused funds were clear standouts in a challenging year.

The Australian dollar’s appreciation from recent lows is eroding returns from unhedged international investments. With analysts mixed on where the currency is heading, opting to hedge foreign currency exposures could provide investors with some peace of mind.

The pendulum may have swung back towards active management this year, but the domestic ETF market is flush with options and continues to steal FUM.

Thematically focused funds have been the big winners in fund flows in the past three years, but most themes have turned out to be fads, new research shows. According to Morningstar’s latest ‘Global Thematic Funds Landscape Report’, over the three years through March 2021, collective assets under management in the 1,349 thematic funds more than…