King Midas once said “everything I touch turns to gold” and in an environment of continuing market volatility, institutional investors are increasingly wishing they had the Midas touch – according to ETF Securities’ Nigel Phelan. Gold is enjoying a stellar run. A surge in the gold price has helped this precious metal overshadow most other asset classes. Gold retuned just over 29 per cent from 1 June 2008 through to 1 June 2009, versus a loss of 32 per cent in the broader market as represented by the S&P/ASX 200 Index. This recent performance tops a decade of strong returns – the value of an ounce of gold has increased almost four-fold in the past 10 years with the steepest ascent between mid 2007 and March 2009.
Super funds man frontline in war on mental illness
As Australia’s unemployment rate continues to climb, depression and, tragically, suicide, threaten to become larger social problems.
Our superannuation funds stand uniquely poised to help – they are in direct contact with most of Australia’s working population, and as providers of life, TPD and income protection insurance, they benefit on many levels from combating mental illness.
Last month, Investment & Technology brought together a roundtable of super fund executives to both share their experiences in this effort, and learn more about the tools available to them – in particular, the Industry Funds Forum initiative, SuperFriend.
The executives also had the chance to learn from two generals in the war on mental illness, from the National Advisory Council on Mental Health and Lifeline. Comminsure, whose pioneering work with SuperFriend you can also read about below, kindly sponsored the event.
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Super funds man frontline in war on mental illness
As Australia’s unemployment rate continues to climb, depression and, tragically, suicide, threaten to become larger social problems.
Our superannuation funds stand uniquely poised to help – they are in direct contact with most of Australia’s working population, and as providers of life, TPD and income protection insurance, they benefit on many levels from combating mental illness.
Last month, Investment & Technology brought together a roundtable of super fund executives to both share their experiences in this effort, and learn more about the tools available to them – in particular, the Industry Funds Forum initiative, SuperFriend.
The executives also had the chance to learn from two generals in the war on mental illness, from the National Advisory Council on Mental Health and Lifeline. Comminsure, whose pioneering work with SuperFriend you can also read about below, kindly sponsored the event.brought to you by:
Going Passive
Insto investors question active management
Never before, or at least never in living memory, have super funds faced such uncertainty as in the past 12 months. But with signs of recovery emerging for both markets and the global economy, trustee boards are feeling that it is safe to get back into the water. Most have been sitting on cashflow build-ups and have recovered a good part of their Aussie dollar hedging losses from last year.
The big question now is: what to invest in? If you believe in the recovery and mean reversion then this could be the best beta play of all time. On the other hand, active managers claim the markets represent a stockpicker’s paradise. The old active versus passive debate has returned with a vengeance. SIMON MUMME and GREG BRIGHT report.
Going Passive
Insto investors question active management
Never before, or at least never in living memory, have super funds faced such uncertainty as in the past 12 months. But with signs of recovery emerging for both markets and the global economy, trustee boards are feeling that it is safe to get back into the water. Most have been sitting on cashflow build-ups and have recovered a good part of their Aussie dollar hedging losses from last year.
The big question now is: what to invest in? If you believe in the recovery and mean reversion then this could be the best beta play of all time. On the other hand, active managers claim the markets represent a stockpicker’s paradise. The old active versus passive debate has returned with a vengeance. SIMON MUMME and GREG BRIGHT report. Cbus puts risk back on the table… slowly
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The $13 billion Cbus is looking to gradually increase the amount of risk within its portfolio, hiking its allocation to equities over the next six to 12 months. Trish Donohue, investment manager at Cbus, said the fund had not yet reallocated the money redeemed from the international equities mandate terminated with AllianceBernstein earlier this year, however in line with its strategy it would be looking to “gradually increase exposure to equities over the next six to 12 months”. Cbus moved to a more defensive position in the lead up to the global financial crisis, increasing its allocation to cash and underweighting its allocations to equities.
Cbus puts risk back on the table… slowly
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The $13 billion Cbus is looking to gradually increase the amount of risk within its portfolio, hiking its allocation to equities over the next six to 12 months. Trish Donohue, investment manager at Cbus, said the fund had not yet reallocated the money redeemed from the international equities mandate terminated with AllianceBernstein earlier this year, however in line with its strategy it would be looking to “gradually increase exposure to equities over the next six to 12 months”. Cbus moved to a more defensive position in the lead up to the global financial crisis, increasing its allocation to cash and underweighting its allocations to equities.
Funds mull currency strategy after 2008’s losses
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The financial year just gone has been challenging for super funds in so many ways, none more so than in the management of their currency exposures. In one month alone, last October, two weeks of manic volatility left the Aussie dollar reeling with a drop of US20c. Many super funds had to write very large cheques to cover their currency hedges. With the A$ back up over US80c, the chances of a similar slump up ahead are not being discounted by market observers.
Funds mull currency strategy after 2008’s losses
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The financial year just gone has been challenging for super funds in so many ways, none more so than in the management of their currency exposures. In one month alone, last October, two weeks of manic volatility left the Aussie dollar reeling with a drop of US20c. Many super funds had to write very large cheques to cover their currency hedges. With the A$ back up over US80c, the chances of a similar slump up ahead are not being discounted by market observers.
Great Depression times three, or credit’s the place to be
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Financial markets are pricing in corporate credit default rates more than three times higher than during the Great Depression, meaning super funds that invest in a highly diversified portfolio of investment grade credit are likely to be compensated for the risks that they are taking regardless of whether spreads still blow out, new research has found. Research from Melbourne-based Omega Global Investors titled High Investment Grade Credit Opportunities for Institutional Investors revealed implied default rates for US corporate bonds at March 31 this year were 38 per cent for corporates and 53 per cent for financials.
Great Depression times three, or credit’s the place to be
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Financial markets are pricing in corporate credit default rates more than three times higher than during the Great Depression, meaning super funds that invest in a highly diversified portfolio of investment grade credit are likely to be compensated for the risks that they are taking regardless of whether spreads still blow out, new research has found. Research from Melbourne-based Omega Global Investors titled High Investment Grade Credit Opportunities for Institutional Investors revealed implied default rates for US corporate bonds at March 31 this year were 38 per cent for corporates and 53 per cent for financials.
IBM offers all channels as it puts its technology stamp on super administration
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IBM Australia is this month rolling out a new digital telephone system for its super fund administration clients, including the Watson Wyatt client funds which were transitioned from April last year. Watson Wyatt, which last year switched administration outsource partners from the former CitiStreet Australia – subsequently bought by its former client Sunsuper – to IBM, has taken an active role in the new arrangement. It was IBM’s second big win of a group of corporate super fund clients, following a similar deal with Russell Investments when it entered the Australian market two years earlier.
