The SG isn’t yet 30 years old and wouldn’t be as hard to end as we might think. If the public doesn’t care enough and if asset owners aren’t vigilant, this month could mark the beginning of the end of the system.
The US Federal Reserve’s decision to make its bond-buying program open-ended won’t ease the extreme liquidity crisis despite Wall Street rallying on the news, according to one top academic.
The nation’s largest super fund has turned a spotlight onto some of the more nuanced risks which come with investing in unlisted assets.
The country’s largest superannuation fund has reduced value of its unlisted assets by 7.5 per cent.
Chief investment officer John Pearce said liquidity in the $85 billion superannuation fund was stable despite the market slump and member switching.
Crisis environments are always tough for the investment chiefs of super funds. It’s important to recognise the range of demands they face during a crisis. You shouldn’t expect most CIOs to make “heroic investment calls”.
Government’s decision to allow financially stressed people to access $20,000 of their retirement savings has taken the super industry by surprise and added further liquidity pressure on funds that were already reeling from a sell-off in equities.
A former adviser to the US Federal Reserve said increased volatility in bonds and turmoil in the money markets from the outbreak of the coronavirus could signal a looming credit event despite the Fed’s latest bid to inject liquidity into the system.
Senior economist Diana Mousina said a global downturn sparked by the coronavirus should start to improve mid-year assuming countries take strong quarantine measures to slow the outbreak.
Hostplus has restructured its investment team to include a second deputy chief investment officer as it buys up equities into the market sell-off.
CIO John Pearce has suspended the fund’s stock lending program amid the worst equity sell off since the black market crash of 1987.
Chief executive Andrew Polson said the market turbulence and supply chain shocks from the coronavirus outbreak was a powerful warning that the margin for error in a highly-leveraged and interconnected world was very low.
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