A2B Symposium - Academic 2 Business - Research informing Business
19th November 2014, InterContinental Sydney, 117 Macquarie St, Sydney NSW, Australia
Dr Yuri Salazar
Topic: Diversification and Risk in Superannuation Funds
(Joint work with Prof Michael Drew and A/Prof Robert Bianchi, Griffith
Business School, Griffith University and Prof Stefan Trueck, Macquarie
This research aims to answer the question of which factors have the highest impact on the wealth outcome at retirement. We focus on the last 10 years prior to retirement as these are the most crucial in determining the wealth outcome. We evaluate the performance of different lifecycle investment strategies for superannuation funds under different scenarios of market conditions, the initial accumulated value of the portfolio, salary and salary growth rates, interest rates and contribution levels.
Lifecycle strategies have become increasingly popular for defined contribution plans and have the advantage of adjusting the portfolio composition towards the age of retirement. Optimal strategies are also able to consider different scenarios. We apply parametric and non-parametric techniques to evaluate different strategies by examining wealth outcomes and risk-adjusted performance measures.
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