Industry Funds: Leaders in Asset Allocation (Essay Sample)

Industry funds: Leaders in asset allocation and product solutions
Industry funds have been consistent top performers in the superannuation game, producing stronger investment returns than retail funds year after year. 
Senior investment research manager at Chant West, Mano Mohankumar, explained that performance differentiation was primarily driven by the industry funds’ higher allocation to unlisted assets.
Industry funds tend to invest in unlisted property, infrastructure plays such as power stations and airports, and private equity while retail funds are more likely to gain that exposure through listed vehicles such as real estate investment trusts (REITs).
Interestingly, while this difference in allocations may lead to stronger outcomes in general performance, it also allowed retail funds to recover faster from the Global Financial Crisis (GFC) than their industry counterparts due to their heavier exposure to listed equities.
This higher allocation of assets derives from a combination of a reliable contribution flow entering the funds through modern awards and a disengaged member base, meaning that there is a high cash flow entering funds and virtually no chance of money coming out of funds. 
As well as this, industry funds have also benefited from having a preparedness to be active with their asset allocation decisions, often shifting away from their long-term asset allocation in order to take advantage of mis-pricings.