CFS FirstChoice Lifestage achieves $1 billion in FUM

Colonial First State (CFS) has today announced that FirstChoice Lifestage has reached $1 billion in funds under management, achieved in less than 300 days since its inception in June 2013.

FirstChoice Lifestage is CFS’s flagship MySuper product, after CFS was the first retail fund in Australia to receive APRA product authorisation for MySuper last year.

The $1 billion milestone comes as another success for the FirstChoice Investments team after the FirstChoice Multi Manager funds (FirstChoice Moderate, Growth and High Growth) were all ranked number one in performance over five years in the recent Chant West survey, released in February 2014.

Peter Dymond, Senior Investment Manager of FirstChoice Investments at CFS, said the growth in FirstChoice Lifestage was indicative of the direction of Australian superannuation and evidence MySuper had enabled new and innovative investment approaches to be adopted by funds.

“The lifecycle investment approach is based on tailoring a member’s asset allocation based on their age, de-risking their portfolio as they get closer to retirement.  There has been much debate in the industry over whether a lifecycle approach or a ‘one size fits all’ approach is best for default funds.  In deciding on the best approach for our members, we felt that ‘one size fits all’ was inappropriate for those of our members who had not selected their superannuation investment strategy.”

“We concluded the best approach was to structure our MySuper option so younger members have higher exposure to risk assets given they have a longer period to retirement and typically lower balances.  When a member gets close to retirement, we believe their risk exposure should be reduced, particularly if they have not considered their financial circumstances.  Members at this age are more susceptible to sequencing risk (i.e. the risk of a large down turn in markets just prior to retirement) and a negative market could be disastrous to their standard of living in retirement,” Mr Dymond said.