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CIFR Grant to investigate MySuper

Yuri SalazarAn important research project focusing on default superannuation has attracted funding from the Centre for International Finance and Regulation (CIFR).

The grant has been awarded to a team led by Prof Stefan Trueck, co-director of the Centre for Financial Risk to investigate ‘The MySuper Default Option: Assessing Portfolio Diversification, Suitability for Contributors and Performance of Superannuation Investment Strategies’.

Post Doctoral Research Fellow, Yuri Salazar, will also be involved extensively in the work.

The CIFR grant reflects the usefulness of the work being conducted by CFR researchers through their proposal to analyse and investigate important aspects of superannuation investment strategies, with direct implications for the financial wellbeing of many Australians saving for retirement through the compulsory scheme.

Project summary

According to the Federal Government, MySuper is “a new low cost and simple superannuation product”, that will provide a “single diversified investment strategy, suitable for the vast majority of members who are in the default option.” As more and more MySuper products are approved by the regulator (APRA), this study seeks to explore the diversification of various MySuper products and their suitability for investors. The study will build on a new measure of diversification, the diversification delta. It will also focus on the performance of MySuper products when a contributor is close to retirement and his or her capital base is near its maximum. In this respect, the performance of MySuper products will be compared to alternative, potentially more conservative investment approaches that reduce downside risks for contributors close to retirement.

Other members of the research team include Dr Robert Bianchi, Senior Lecturer, Department of Accounting, Finance and Economics, Griffith Business School, Griffith University, and Professor Michael Drew, also from the same department at Griffith University.

The total project volume is about $100,000, with funding shared evenly between CIFR and Macquarie University.

More information on the latest CIFR research projects