Session recording

Con Michalakis, Jacki Ellis: Member switching, early access, and tail risk

Member switching, early access, and tail risk

Managing superannuation assets requires a long-time horizon. High fees and the location of risk with the member and not the fund has meant investors have ignored tail hedging. But government policy changes and member propensity to move funds during a market crisis cannot be ignored. Are super funds re-evaluating the role of tail risk strategies in response?

Speakers:
Con Michalakis,
chief investment officer, Statewide Super
Jacki Ellis, portfolio manager, retirement strategy, Aware Super (First State Super)
Moderator: Colin Tate, chief executive, Conexus Financial

Key Takeaways

  • March saw a perfect storm whereby market performance and the unexpected early access provision altered the ability for investment committees to take a long-term view.
  • For the first time since the GFC tail-risk hedging through options or similar strategies is very much on the table as funds look to avoid anomalies in equity drags on the overall portfolio.
  • Sharp movements in the value of the AUD have significant scope to alter the performance of international assets making foreign exchange hedging and increasingly important topic.