Australia’s super system faces three converging investment challenges: deciding when to go active; navigating the growth of “benchmark-anchored” investing; and managing capacity constraints as assets under management balloon. Geoff Warren, research fellow at The Conexus Institute, unpacked the problems at the Fiduciary Investors Symposium.
The AI evolution has a long way to run, according to Blue Owl’s Alicia Gregory, who told the Investment Magazine Fiduciary Investors Symposium that the US market remains one of the best places to get exposure to it.
UniSuper chief investment officer John Pearce has no problem pulling mandates if a trusted portfolio manager leaves an external manager, arguing that investment edge often rides on top talents. In a wide-ranging chat at the Investment Magazine Fiduciary Investors Symposium, Pearce reflected on more than 16 years leading the fund’s $150 billion portfolio.
Passive equity strategies have grown to dominate the investment landscape, but rising concentration risks, benchmark performance tests, and hidden passive costs are prompting asset owners to consider more nuanced approaches.
Despite prevailing pessimism, Stanford University academic Professor Stephen Kotkin has told the Investment Magazine Fiduciary Investors Symposium that the US’ role as a global superpower is a long-term trend asset owners can count on. But one of the most significant issues they must navigate is how the US and China learn to co-exist while pursuing diametrically opposed objectives.
Asset owners that tip billions into a broad emerging markets opportunity set and hope for the best will likely get the worst outcomes. A better way is to examine each country and manager on their own merits.
The Australian Securities and Investments Commission’s review of how superannuation funds communicate with members on retirement issues has revealed patchy progress and raised multiple issues requiring further attention and action. But funds say the report a useful assessment of progress to date and the specific improvements they can make.
The Mercer CFA Institute Global Pension Index ranks Australia’s pension system seventh-best in the world, with the Netherlands continuing to lead the way. An improvement in Australia’s score over last year was due primarily to better adequacy, driven by an increase in superannuation guarantee contributions. A lack of compulsion on taking income in retirement continues to be a drag.
With more of their investments increasingly subject to “rule-of-law” risk, and even exceptional assets overvalued, the Investment Magazine Fiduciary Investors Symposium has heard that while many asset owners remain bullish about US exceptionalism, they are questioning how much they are willing to pay for it.
AustralianSuper CIO Mark Delaney says that a profit-to-member superannuation industry defined by similarities between funds is a thing of the past. But it will have to keep changing if it wants to keep up with the retail platforms.
Superannuation investment in the UK is expected to more than double over the next decade in a boon not just for the retirement savings of everyday Aussies, but also the British economy, at a time when the world is grappling with political turbulence. But governments can still do more to give the stewards of pension capital the confidence their investments will deliver members the best returns.
Australia and the UK have very different pension landscapes, but the latter might have a leg up on the land down under when it comes to performance testing and retirement advice and defaults, writes David Bell.
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Investment Magazine provides in-depth, monthly analysis of trends and developments for all the businesses in which superannuation funds engage‚ including asset allocation, investment manager selection, custody and fund accounting, member administration, group insurance and compliance.
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