Some super funds are not waiting for implementation of the Cooper Review to enhance their risk budgeting through indexing, with QSuper and UniSuper revealing big passive plays last month, countered somewhat by the likes of Westscheme moving in the opposite direction. In arguably the biggest single mandate announcement in Australian superannuation history, State Street Global Advisors confirmed it was running three large passive equity mandates for QSuper, totalling $10 billion across Australian equities, international equities and global REITs.

At least some of the mandates, which all have a tax-aware component, have been running for several months. The mandates are understood not to be ‘placeholder’ affairs, but the permanent ‘core’ for QSuper’s $28 billion fund, which CIO Brad Holzberger and team will then build higher-risk, higherpotential return satellites around. Meanwhile, the $25 billion UniSuper is revolutionising its $4.5 billion international equities portfolio, terminating every active developed-markets manager in favour of passively tracking the MSCI World, while alpha is sought among specialist regional and sectoral managers, with a listed technology mandate to be first cab off the rank.

The CIO of UniSuper, John Pearce, said the overhaul had been in progress over several months. It is understood the interim index management is being performed by UniSuper’s own internal investment team. “This move is not an argument for passive management: myself and my team here are big believers in active management. It’s just a question of where the allocation of our research time to find the best active managers yields the best results,” Pearce said. “And at this stage, we don’t believe that’s in developed market equities mandates.” A specialist technology manager is currently being sought, with Pearce reasoning that this was a natural area of underweight for Australian investors given our own market’s scarcity of technology stocks.

UniSuper has maintained its existing active emerging markets mandates, meaning houses such as GMO, Mondrian and Treasury Asia Asset Management continue to run money for the big industry fund. It is understood sectoral mandates have also been maintained, such as that which Fidelity Investments runs for the scheme in global small caps. Meanwhile, in the clients of Access Capital Advisers appear to be taking the opposite tack, embracing broad-market active equity management instead of the passive stance which had been integral to its famous ‘two portfolio’ approach.

Westscheme recently announced an overhaul of its $450 million developed market equities portfolio, rescinding passive allocations to BlackRock and State Street Global Advisors, in favour of three active managers.In a move understood to shortly be echoed by other Access clients, Westscheme appointed two quantitative global equity managers, AQR and PanAgora, to 35 per cent of the global equities portfolio apiece. A further 15 per cent was assigned to fundamental stockpicker Massachussetts Financial Services Investment Management, while the balance went to RealIndex Investments.

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