Investor Weekly's Chris Kennedy speaks to VicSuper chief executive Michael Dundon about changes to the fund's member investment offers and the progress of its potential merger with Vision Super.
In the past fortnight it has announced the introduction of daily unit pricing, as well as the addition of Australian shares and term deposits as investment options for members. It also recently overhauled its core international fixed interest portfolio to reduce exposure to global sovereign bond risk, in partnership with the fund's investment adviser Towers Watson, fund manager BlackRock Investment Management and index provider Barclays Capital.
Michael Dundon spoke with Investor Weekly:
Your fund recently moved to daily unit pricing for members. What was the impetus for this?
The main reason we're doing it is to give members the opportunity to do daily switching, instead of monthly. It also enables us to redirect future contributions from members - for example, if members have their balance in a balanced fund and want to contribute going forward into growth. This allows us to redirect contributions more easily.
Are there any other changes on the way for VicSuper?
Daily pricing will also help support the introduction of term deposits - we're going live with that at the beginning of February. There are a range of system changes, which give the member more flexibility.
In September you announced VicSuper was in preliminary discussions with Vision Super regarding a potential merger. How is that progressing?
We're still working forward with our discussions but things are going reasonably well at this stage. These things obviously take a while to work through.
Are there many potential synergies between the two funds?
It's a bit early to say but we do have very similar operating models in that we both invest as managers of managers, we both do our own internal administration, and we both offer financial planning advice. So in that sense, we're quite well aligned.
And is your financial planning service also done in-house?
For us, all our financial planning is done in-house. We have our own regional network of planning people based in Traralgon, Geelong, Bendigo, Blackburn and Melbourne. We have our own AFSL [Australian Financial Services Licence] and employ roughly 40 planners. That's been going for a number of years, since the early days of the fund - more than eight years ago.
How are you preparing for MySuper?
We've lodged our MySuper application, and now we're waiting for feedback from APRA [the Australian Prudential Regulation Authority].
