NGS Super will trim its exposure to Australian equities and reallocate assets to absolute return funds.
The natural growth of the asset class due to appreciation in the Australian share market meant the fund was now substantially overweight in Australian equities at 34 per cent. Colin McGuinness, chief executive of NGS Super said this exceeded the fund’s benchmark allocation of 32 per cent. “Most asset classes are above fair value, so we’re not looking to put much into these areas at the moment,” McGuinness said. McGuinness said the fund, which now has more than $2.2 billion in assets, would reallocate the excess securities in Australian equities to absolute returns funds that were more defensive in nature. NGS Super’s diversified option ranked sixth in SuperRating’s top 10 super returns for the 12 months to the end of June, with 17.9 per cent, a result McGuinness acknowledged was attributable in part to the fund’s overloading in Australian equities. He said the fund’s strong performance was also due to new asset managers and significant reduction of the fund’s fixed interest position, moving into short-term debt and floating rates.
The brunt of losses from the LA wildfires are expected to be borne by primary insurers and high-risk reinsurance programs, but super funds are nevertheless closely monitoring the possible impact of the fires on catastrophe bond and insurance-linked securities exposures.
Simon HoyleJanuary 17, 2025
