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Australian super funds remaining over-cautious
Australian superannuation funds are remaining cautious about their re-entry to investment markets because of the depth of the scarring created by the global financial crisis, according to leading North American fund manager, Brandywine Global Investment Management director of global macro research, Francis Scotland.
In an interview with Super Review in Philadelphia this week, Scotland said there had been a "massive flight to safety" over the past five years and that Australian super funds had been no exception.
"I like to call it a bull market in fear," he said. "So people have piled into anything that has got yield that they think is safe — bonds, money market funds, bank deposits," he said.
Scotland said that Australian pension funds, like many other investors, had become really gun-shy and were generating one excuse after another not to have trust in a sustained market recovery.
However he acknowledged that such investors needed to see something good happen before they were likely to adopt a more positive stance.
"Our view is that we are on the cusp of a more meaningful uptrend than people think is possible," Scotland said.
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The Australian Retirement Trust is adopting a “healthy level of conservatism” towards the US as the end of the 90-day tariff pause approaches, with “anything possible”.
Uncertainty around tariffs and subdued growth may lead to some short-term constraints in relation to the private credit market, the fund manager has said.
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