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International equities pay off for REST
REST Industry Super's decision to increase its weighting to international equities 18 months ago appears to have paid off, with the fund recognised as one of the top performers for the 2012/13 financial year.
Chief executive Damien Hill said the fund's returns had benefitted from its decision to increase exposure to international equities from 23 per cent to 32 per cent off the back of weakening global fundamentals and mispriced investments.
"The move into overseas equities has continued to pay off and the unhedged basis of that has certainly paid off," he said.
"We had the advantage of a relatively high Australian dollar so we felt that even if things did go badly with overseas equities on an unhedged basis, the Aussie dollar would drop - so any drop in asset value in a local currency term would be largely offset by the drop in the Aussie dollar as well."
Super Ratings ranked REST Super's Core strategy the best performer over five and seven years to June 2013, and second over the financial year with a return of 18.4 per cent, behind Statewide Super's growth option at 18.5 per cent. Its pension strategy returned 20.76 per cent for the year to 30 June.
The fund's exposure to international equities returned 32.95 per cent, and 37.62 per cent for its pension option, over 12 months to 30 June.
Hill said that as compulsory contributions increased and the superannuation pool became an ever-larger pot compared to gross domestic product, all super funds would need to review their exposure to international equities.
"The decisions now are not as easy as they were at that time in our view - you've had markets bounce - but we still think there's further to go in that area," he said.
Hill said other investments had also performed well including credit; infrastructure, which had returned 13 per cent for the financial year; and direct property which returned approximately 20 per cent.
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ACS FIXED INT - AUSTRALIA/GLOBAL BOND
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3y(%)pa
1
GAM LSA Private Shares AU I
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2
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32.63 3 y p.a(%)
3
Fidante Credit Suisse Global Private Equity
32.16 3 y p.a(%)
4
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28.28 3 y p.a(%)
5
Plato Global Alpha A
27.76 3 y p.a(%)
