REI Super builds wall of cash
REI Super has been building up its cash holdings and selling off equities, according to its investment consultant.
Ibbotson Associates managing director and chief investment officer, Daniel Needham, said the fund had continued to sell its exposure to equities and assets that had done well in December.
"We've stopped selling bonds because bonds are no longer moving up in price, they're moving down, but what we're doing is building extra cash," he said.
Needham said that although some thought it was a time for investors to be aggressive, the consultant was taking a cautious approach.
As other asset classes started to look less attractive, the fund was holding "higher than normal amounts of cash", Needham said, and if the market environment continued, it would continue to sell better-returning assets and build up cash.
"Our goal is always to buy assets at attractive prices, and that tends to be at times when most people are very concerned about markets - and that certainly isn't the case now," he said.
Prices would fluctuate a lot, so patient long-term investors would be able to buy assets at more attractive prices in the future, according to Needham.
He said REI had also invested into Australian commercial property and unhedged assets for their defensive characteristics.
Within equities, REI had invested into global listed infrastructure, because cash flows were less sensitive to the economic cycle and they were well priced.
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
Australia's largest super fund has announced its new chief financial officer as the fund prepares for its next phase of growth.
The industry super fund has appointed a new company secretary with extensive governance experience.
The fund has launched a new campaign after finding many older tradies have lacked confidence understanding entitlements and missed pension income.
Unions and the Opposition have raised fresh concerns about APRA and ASIC’s failures amid fallout from First Guardian and Shield.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
211.16 3 y p.a(%)
2
Loftus Peak Global Disruption Fund Hedged
121.06 3 y p.a(%)
3
Global X 21Shares Bitcoin ETF
72.47 3 y p.a(%)
4
Paradice Australian Mid Cap A
69.09 3 y p.a(%)
5
Smarter Money Long-Short Credit Investor USD
68.96 3 y p.a(%)
