POWERED BY MOMENTUM MEDIA
VicSuper moves to reduce sovereign risk
VicSuper has taken measures to insulate its core international fixed interest portfolio against sovereign risk.
Working with its investment adviser Towers Watson, the fund has customised the Barclays Global Aggregate Benchmark in order to place caps on the amount invested in countries with large deficits to fund.
The previous Barclays benchmark used by VicSuper was a market-cap weighted index with sovereign bond exposure of around 60 per cent.
The new, customised Barclays benchmark has a sovereign component that applies a 10 per cent country cap and a 30 per cent collective cap on Eurozone countries, according to a VicSuper statement.
"This index is then overlayed with the BlackRock Sovereign Risk Index - a non-investable index that measures relative government creditworthiness in a systematic manner," according to the statement.
VicSuper's chief investment officer Oscar Fabian acknowledged there was no individual solution to investing in global bonds that could safeguard against systemic risk.
"However, we strongly believe that this new approach to sovereign exposure will go a long way towards assuaging our medium-term concerns about the concentration and default risks in the government bond market," Fabian 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
Governor Michele Bullock took a more hawkish stance on Tuesday, raising concerns over Donald Trump’s escalating tariffs, which sent economists in different directions with their predictions.
Equity Trustees has announced the appointment of Jocelyn Furlan to the Superannuation Limited (ETSL) and HTFS Nominees Pty Ltd (HTFS) boards, which have oversight of one of the companies’ fastest growing trustee services.
Following growing criticism of the superannuation industry’s influence on capital markets and its increasing exposure to private assets, as well as regulators’ concerns about potential risks to financial stability, ASFA has released new research pushing back on these narratives.
A US-based infrastructure specialist has welcomed the $93 billion fund as a cornerstone investor.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Global X GlobalX FANG+ ETF
33.51 3 y p.a(%)
2
Spire Oaktree Opportunities XI Second Close
32.68 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.62 3 y p.a(%)
4
Spire Oaktree Opportunities XI First Close USD
31.36 3 y p.a(%)
5
Fidante Credit Suisse Global Private Equity
29.60 3 y p.a(%)
