Comment

Capital ultimately backs capital. While politicians might make the headlines, it’s the bond markets that keep the score – and governments forgetting this cast-iron rule ultimately pay the price.

For several years, investors, from institutional to retail, couldn’t get enough of the tech stocks with all their promises of future growth. But now the market has spoken and it’s saying precisely this – valuations matter again.

US President Donald Trump’s tariff announcement has driven spreads wider. In this volatile market environment, investors need to exercise caution and keep a careful eye on the fundamentals.

The dominance of the share market’s heavyweights over the past three years is making valuations further down the line look attractive again.

A Coalition Government will want to curb the union role in superannuation, especially in the industry funds – the largest superannuation sector at nearly $1.5 trillion. Setting up a royal commission to achieve this end will be overkill.

The power of in-depth, fundamental research into companies and broader sectors and trends to generate alpha remains a compelling argument for active investment strategies.

While private credit funds have attracted much-merited attention, conducting a thorough due diligence is challenged by how portfolios are managed and constructed, let alone the risk of potential defaults. The deflective reply to investor queries about this is often akin to, “look at our past returns, we clearly know what we’re doing”.

The employer-employee split worked well when not-for-profit funds were in their infancy. Today, in an era of member choice and the growing demands of retiree members, it’s a model that fails to cut the mustard.

It’s been an astonishing two years for US equities, but the same can’t be said for global asset markets. 2025 could be a year to explore out of favour markets, according to Ruffer’s Jasmine Yeo.

All strategies work – until they don’t. While the hottest ticket in town is still private credit, is it everything it’s cracked up to be?

This year’s top 10 stories included a peek into AustralianSuper’s international equities build out in London, AMP’s move to slash employee benefits, and plenty of hard-hitting analysis of the issues that matter in institutional investment. But the real story is how readers helped shape all of that coverage.

If 2024 showed us anything, it’s that super funds have to become more than accumulation machines if they want to maintain their status as the trusted guarantors of most Australians’ financial future.