Super funds are deviating from their original mission as “guardians of pension” and are starting to look and sound worryingly like asset managers, according to industry veteran and former Lazard Australia CEO Rob Prugue. As Australia’s retirement savings pool continues to balloon, he asked whether the sector’s immense scale has created a moral hazard.
Promoting gender diversity is a big issue for asset owners and despite the progress made so far, many investment teams are still characterised by finance stereotypes that can deter more diverse candidates from joining the sector. But as a starting point for those looking to bring genuine change – be it internally or in the broader industry – the Fiduciary Investors Symposium has heard that difficult conversations must be had about how to eliminate “micro-exclusionary” events and recognise men and women’s different ways of working.
The story of emerging markets in the past decade has been filled with both hopes and disappointments. Despite bullish GDP growth in developing countries and the promises that came with it, EMs have delivered lukewarm performance during the period. Some may argue that there has been an underestimation of risks, but the Fiduciary Investors Symposium heard that the disappointment is a product of “naive expectations”.
Amid growing regulatory scrutiny over super fund performance, fees and insurance, Morningstar plans to launch a rating system to help support advisers in choosing the most appropriate fund for their clients. The researcher believes its track record dealing directly with retail and wholesale funds gives it an edge over other superannuation ratings firms such as Chant West and SuperRatings.
It was beholden upon investment leaders to consider very carefully the gamut of issues associated with developing internal teams before they decide to absorb certain capabilities, according to 1886 Consulting founder and director Doug Talbot. Internalisation – particularly in private markets – solely for cost saving purposes might address one issue but, if not managed carefully, could raise a host of others.
Super funds are increasingly taking on characteristics of asset managers as they internalise investment capability. But AustralianSuper global head of real assets Nik Kemp told the Fiduciary Investors Symposium that internalisation is not only about driving down costs, which in fact ranks well down the order of benefits.
Have some ESG-conscious investors been getting it all wrong, and does the world in fact need thermal coal profits in order to help fund clean energy transition? Excluding companies such as Glencore, which are major thermal coal producers, may close off opportunities to participate in the energy transition as they pivot to production of energy-transition metals.
APRA has ordered Mercer Super to meet additional licence conditions after “risk management and compliance management deficiencies” were identified by the regulator.
A big problem requires bold solutions, and an Investment Magazine roundtable has heard some bold ideas on how super funds can create and deliver leading-edge retirement income solutions for members. The roundtable heard that product is one part of it, and guidance and advice will be integral, but a fundamental issue is member engagement.
With RG97 and the Your Future Your Super performance test pushing a strong narrative of bringing down fees at all costs, members may actually be missing out on attractive net returns from more expensive-to-manage asset classes. The Fiduciary Investors Symposium has heard that it’s time for the super sector to bust the myth.
A divergence in the performance of economies around the world is creating fresh opportunities for active management of fixed income portfolios, the Investment Magazine Fiduciary Investors Symposium has heard. But even as that happens, it is creating new challenges for creating products for members.
Aware Super has taken home ‘super fund of the year’ and ‘pension fund of the year’ titles at the Chant West Awards 2024.
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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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