Brighter Super returned double digits across its accumulation and retirement options for the financial year, and is gearing up to make sure its portfolio can weather conditions even stormier than those seen following Liberation Day.

The fund’s MySuper option returned 10.89 per cent (10-year return of 7.23 per cent), while its growth and balanced options returned 11.65 per cent (seven year return of 9.54 per cent) and 10.54 per cent (seven-year 8.29 per cent) respectively.
“We’re working towards making the portfolio more resilient to the environment we’ve got… That environment is one that will be volatile on a number of fronts –macro, political and geopolitical,” Brighter Super chief investment officer Mark Rider tells Investment Magazine.

That’s led the fund to build out its infrastructure portfolio to deal with inflationary pressures and volatility, and shift nearly $3 billion from its equities portfolio into active strategies, which Rider believes will be more effective in an environment defined largely by uncertainty.

“(Active) Australian equities has been performing quite well; in international equities, and we’re probably not out on our lonesome there, it has been a difficult patch to be in at the moment,” Rider says.

“But we’re happy. The move was driven particularly by the increased concentration that we were seeing in global and domestic markets, and having room to move on the fee side. We’re not worried about a bit of underperformance over a short period of time. It’s a strategic move to provide some better diversification across the portfolio.

“It’s an area where we’re constantly reviewing how the portfolio is performing. But we’re pretty happy with the program we’ve got at the moment, even though we’re always trying to make it a little bit better if we can.”

The fund has also been more opportunistic in property, which has had “a pretty tough time” over the last few years and where it has been enacting the first tranche of its $500 million Queensland Investment Strategy to put more money into the Sunshine State, propelled by the tailwinds of population growth, record infrastructure spending and the “catalyst” of the 2032 Olympic Games.

“We’ve been acquiring assets across a number of mangers,” Rider says.

“One of them has been Barings, which has a ($100 million) mandate from us for the Queensland Investment Strategy, and we’ve been in the process of acquiring a couple of properties in Queensland. This is the time to be moving back into property.”

The broader macroeconomic environment – the economy has slowed, inflation has come back into the RBA’s target range in Australia (with signs it will do the same overseas) and rate cuts are coming through – is conducive to a re-acceleration in growth over time, Rider says.

“That is being complicated by changes in economic and trade policy in the United States, but while we’re seeing some tariffs getting re-imposed at the moment and we’ll see where they go, you do have more fiscal stimulus coming through,” he says.

“There’s a better sequencing there from a macro perspective, and it’ll be a bit of a transition year as we move on from high inflation and high rates.

“It’s going to be one where growth is sort of middle of the road, and that’s not necessarily one that’s bad for equity markets.”
Like other funds, Brighter is thinking more deeply about its currency exposure following swings in the value of the US dollar, the safe haven status of which has been undermined by trade and economic policy uncertainty.

“The composition we’ve got (in the fund’s currency exposure) doesn’t necessarily dictate that we should be making any big changes at the moment – but we’ve discussed it a lot more than we have for a while,” Rider says.

“Particularly with what’s playing out in the US – the US dollar has been very strong and we’ve clearly seen a move back towards more average levels. It’s also been discussed that there’s this end of US exceptionalism. Clearly, some strength has come out of the US dollar.”