The LUCRF industry fund has almost completed an overhaul of its Australian equity portfolio, but has flagged a decrease in its size relative to the international shares portfolio, itself about to be formally reviewed.

Chief executive of the $2.5 billion scheme, Greg Sword, said the split between Australian and international shares within the balanced option had been roughly equal in the past. As at March 23, 2009, the balanced allocations were 24 per cent and 28 per cent respectively.

However Sword said there had been investment committee discussion about further increasing the bias towards international shares, given the relative size of the Australian market.

LUCRF’s investment team, led by investment oversight manager David McCusker and assisted by asset consultant Watson Wyatt, have already affected some changes to the Australian equity portfolio, and the rest are currently in transition. A formal review of the international equities portfolio will follow.

Sword said the fund was disappointed by the balanced option’s 2008/09 return of -13.3 per cent, however he pointed out this was around the median, and that the fund could look forward to brighter days because it only had a small unlisted assets component, meaning it would not be affected as valuations of unlisted assets continued to ‘catch up’ to falls in their listed proxies.