POWERED BY MOMENTUM MEDIA
Refocus debate on superannuation asset allocation: ASFA
The Association of Superannuation Funds of Australia (ASFA) has said criticising the industry over its current asset allocation is over-simplifying superannuation fund investment in equities and corporate bonds.
While ASFA support the need for debate, they said conversation needs to refocus on facts and the role the super industry can play in developing a corporate bond market and enhancing its role in the economy.
ASFA chief executive Pauline Vamos said ageing demographics and increasing market volatility has enhanced the important role Australia's superannuation pool of assets plays in the Australian economy.
"There has been criticism that the superannuation industry does not invest enough in the corporate bond market but, the fact is, many Australian corporates find it difficult to issue bonds in the Australian marketplace.
"Super funds have fundamental faith in Australian corporates and would like to display that faith by providing debt, whether it be to banks, government or corporates, but the foundations for developing a sustainable market are not yet there," Vamos said.
She said a changed investment environment and demographics should drive debate on long-term structuring of superannuation portfolios and also on the role of fixed interest investments.
As Australian banks find it more and more difficult to access debt overseas, Vamos said the discussion needs to be centred around developing the Australian market and ensuring superannuation funds can invest in domestic bonds and allow Australian corporates to have a choice of funding.
"What is being missed in the public debate is that whether it's equity or debt, the underlying investment is still in Australian corporates.
"The role of super in fixed interest is part of the wider conversation on how we ensure that the super pool drives the economy, drives sustainable long-term returns and delivers adequate retirement incomes," she said.
AUTHOR
Staff Writer
Money Management staff writers are writers who contribute to the website from time to time. If you would like to discuss the content contained within this article please contact us.
Recommended for you
Jim Chalmers has defended changes to the Future Fund’s mandate, referring to himself as a “big supporter” of the sovereign wealth fund, amid fierce opposition from the Coalition, which has pledged to reverse any changes if it wins next year’s election.
In a new review of the country’s largest fund, a research house says it’s well placed to deliver attractive returns despite challenges.
Chant West analysis suggests super could be well placed to deliver a double-digit result by the end of the calendar year.
Specific valuation decisions made by the $88 billion fund at the beginning of the pandemic were “not adequate for the deteriorating market conditions”, according to the prudential regulator.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.56 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
31.06 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.81 3 y p.a(%)
