POWERED BY MOMENTUM MEDIA
Industry funds increase allocation to equities
Compared to how funds allocated to March this year, industry super funds have slightly decreased their allocation to infrastructure in the 6 months to September – dropping from 11 per cent to 10.6 per cent, according to the latest APRA data.
In comparison, public sector funds upped their allocations to the asset class from 7.8 per cent in March to 8.6 per cent in September, while retail funds saw a slight decline from 3.8 per cent to 3.5 per cent, and corporate funds a slight bump from 5.2 per cent to 5.4 per cent.
The figures come amid growing market appetite for infrastructure investments and continued positive sentiment for the asset class, with a portfolio manager noting last month that the fundamental needs of society provide a compelling case for the continued relevance of this asset class moving forward.
Namely, at an event in Sydney last month, Sarah Shaw, chief investment officer at 4D Infrastructure, said while uncertainty creates volatility, focusing on infrastructure’s strong fundamentals and market inefficiencies allows investors to benefit from inevitable themes.
“Why I say this ‘must happen’ is because it doesn’t matter who is running the US, it doesn’t matter the direction of interest rates, it doesn’t matter what the market is doing. These investments must happen or the world is going backwards,” she said.
Based on the APRA data released on Thursday, infrastructure again ranked as the third most favoured asset class in industry fund portfolios, trailing behind equities (58.2 per cent) and fixed income (20.4 per cent).
Equities saw the biggest increase in allocations from March to September, with the figure moving from 55.4 per cent to above 58 per cent in industry fund allocations, while retail funds held an allocation of 60.2 per cent to the asset class.
Fixed income was also broadly popular, with retail funds committing 18.8 per cent to this asset class, flat from March.
The real discrepancy was in funds’ commitment to infrastructure depending on their type, with industry funds favouring it above all others.
Property, however, was again fairly evenly distributed, with industry funds allocating 7.0 per cent to the asset class, and retail funds dedicating 6.2.
Retail funds, like in March, lead the charge with private debt with an allocation of 1.2 per cent, compared to industry funds’ 1.0 per cent.
As for alternatives, this asset class was most popular among corporate funds with an allocation of 2.9 per cent, a slight decline from 3.3 per cent, while industry funds allocated 1.0 per cent down from 1.2 per cent in March, and retail funds 0.9 per cent.
Broken down along fund lines, APRA’s data revealed Australian Super had the biggest allocation to equities of $229.8 billion, followed by ART with $182.4 billion, and Aware Super with $108.3 billion.
Regarding infrastructure, the country’s biggest fund allocated $43.96 billion to the asset class, while ART allocated $32.1 billion, and Aware Super $20.3 billion.
More to come.
Recommended for you
AMP has made its first foray into bitcoin, confirming a modest allocation to the cryptocurrency, according to its senior portfolio manager.
Fund returns bounced back in November following a subdued October, with SuperRatings reporting 2.4 per cent return for the median balanced option.
Law firm Maurice Blackburn has announced it has reached a settlement with MLC over a class action alleging delays in transferring members to MySuper products.
The superannuation industry is widely supportive of the government’s update on DBFO, after it was revealed funds would have two options for charging fees for the advice provided by the new class of adviser.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Global X Ultra Short Nasdaq 100 Hedge
96.66 3 y p.a(%)
2
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
3
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
4
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.73 3 y p.a(%)
5
Fidante Credit Suisse Global Private Equity
30.15 3 y p.a(%)
