It might be time for asset owners to diversify away from the United States – but they should also beware the “Thucydides Trap” and pay attention to small markets that might benefit from money leaving North America.
Equity volatility as an asset class is increasingly recognised as a useful diversifier in portfolios, but the cost can be off-putting for some investors. The Fiduciary Investors Symposium in the Blue Mountains hears the case for incorporating active management in volatility strategies.
Treasurer Jim Chalmers’ proposed levy on unrealised gains in super funds isn’t reform, it’s our home-grown equivalent to “Liberation Day”: reactive, populist and a money grab as a budget filler. Reform is indeed needed, but one which equally builds a moat around our $4 trillion super from self-serving political grabs from both sides of the political fence.
With a growing number of Australian asset owners starting down the path to adopting a total portfolio approach, there’s a wealth of knowledge to be gleaned from their international peers.
Aware Super is keeping a close eye on Your Future, Your Super “complications” as it tries to decarbonise its portfolio and invest in the transition – and Rest, wary of geopolitical upheaval, is doing the same.
Australians nearing retirement face decisions more complex than at any other stage of their financial lives, yet it’s at this precise point the superannuation system lets them down. But super funds are heeding the message that they must deliver a better retirement experience and that it’s about far more than just product.
Future Fund chief investment officer Ben Samild says foreign currency exposure might be the most important return lever the fund has in its portfolios. At the Investment Magazine Fiduciary Investors Symposium in the Blue Mountains next week, Samild will take delegates on a deep dive into how the $241 billion fund has put into practice its belief that the investment thinking that delivered strong returns over previous decades needed to change.
The corporate regulator says that it won’t back down from its intense scrutiny of death benefit claims handling by superannuation funds and believes that boards and directors are unfamiliar with the nuts and bolts of their own funds.
Brighter Super has turned to one of its group insurers to help it with a retirement solution for members who’ve accumulated enough that they don’t qualify for the full Age Pension, but not enough that they’re confident their income will last their whole lifetime. It’s the latest piece added to a retirement income puzzle that regulators say all funds must do more to solve.
Asset owners face the enduring challenge of how to achieve outperformance while managing risk effectively. Robeco quant client portfolio manager Rob Huisman says equity markets are now dominated by mega-cap tech stocks, creating a landscape where passive strategies offer cost-efficiency but limited upside and traditional active approaches bring unpredictability and higher costs.
The advantages of quant investing over fundamental investing, including how strategies respond in volatile market conditions, have been well proven over the past quarter of a century. Robeco head of Next Gen research Mike Chen says concerns about a lack of transparency are also unfounded.
Fresh from a big technology overhaul, Cook Islands National Superannuation Fund is ready to start diversifying its portfolio as risks grow in the US market. Its small size and remote location mean it lacks the advantages of some Australian funds, but CIO David Brown says that going to work in a Hawaiian shirt is still “pretty cool”.
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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.
We acknowledge the Traditional Custodians of this land upon which Conexus Financial sits, the Cadigal of the Eora Nation. We recognise their continuing connection and unique cultural and spiritual relationships to the land, waters and community. We pay our deepest respects to them and their culture, and to Elders both past and present.
