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The $13 billion Cbus is looking to gradually increase the amount
of risk within its portfolio, hiking its allocation to equities over the next
six to 12 months. Trish Donohue, investment manager at Cbus, said the fund had
not yet reallocated the money redeemed from the international equities mandate
terminated with AllianceBernstein earlier this year, however in line with its
strategy it would be looking to “gradually increase exposure to equities over
the next six to 12 months”. Cbus moved
to a more defensive position in the lead up to the global financial crisis,
increasing its allocation to cash and underweighting its allocations to
equities.
The asset allocation of the
fund’s Core Strategy Option, which claims around 92 per cent of members, is: 46
per cent equities, 14 per cent infrastructure, 17 per cent property, 9 per
cent private equity, 5 per cent fixed interest, 6 per cent cash and 3 per cent
other alternatives. “Looking forward, we are moving to take on a little more
risk in the portfolio through allocation to equities,” Donohue said. “This will be done in a measured way based on
our medium term outlook for the investment markets.” The fund is also reviewing
opportunities in the credit markets, with a focus on investment grade credit,
however Donohue said the fund had not made any direct allocations.
Having initially prioritised listed equities
and property, Cbus is “steadily working on ESG integration for other asset
classes, particularly infrastructure and private equity,” Donohue said. The
fund hired former Industry Funds Management sustainability manager Louise
Davidson as ESG investment manager earlier this year.
Cbus is a foundation member of the Australian
Council of Super Investors (ACSI), a signatory to the United Nations
Principles for Responsible Investment (UN PRI) and the Investor Group on
Climate Change. Through the Investor Group on Climate Change, Cbus is
broadening its understanding of the impact of climate change on its
investments, and looking at opportunities for investors in the “inevitable
transition of the economy toward a low-carbon basis”, Donohue added.