News

The EM story of economic growth and portfolio diversification should work in theory – but what’s worked in practice has been altogether different. Still, gloom around China obscures the many bright spots in a diverse market.

BNP Paribas’ securities services division has done well for itself in the NAB Asset Servicing feeding frenzy, adding a fistful of managers and insurers to its platform in addition to its big Insignia Financial win.

The custodian has leapt up the league tables off the back of its big Australian Retirement Trust win, and it’s now getting ready to transfer a number of former NAS clients to its platform even as it beds down the megafund integration.

The MySuper reforms have seen costs come down and members getting a better deal, according to a decade of data compiled by Chant West, but the laser focus on fees from government and the regulators mean the industry’s opinion is “generally less sanguine”.

The $78 billion super fund has filled out its impact portfolio with a new listed equities mandate as it aims to have one per cent of FUM allocated to impact opportunities by 2026.

Tailwinds from the United States Inflation Reduction Act underpin the $170 billion super fund’s latest co-investment in Galway Sustainable Capital, and the move will also take the fund’s private equity portfolio into financial services and further offshore.

Big super’s in-sourcing of investment management means contending with new and hidden costs,
but funds are also fretting the unintended consequences of a laser focus on fees.

Australian Retirement Trust has seen the cycle of in- and out-sourcing around the world and doesn’t want to be part of the same ‘pattern’. But even very large super funds have to think hard about their service providers, with counterparty risk emerging around similarly large managers.

YFYS is driving an uplift of the $31 billion Brighter Super’s investment strategy, while wider super fund performance is narrowing even as competition for new and switching members heats up with the end of default distribution.

Betting on mega-caps has rarely paid off for active managers, but investors who want exposure to the US market are often forced to take on massive stock specific risk for or against the Magnificent Seven. A mega-cap mean-reversion could be a tailwind once again.

Another former NAS client has found a new home, with Citi Securities Services bringing fund manager Ausbil on board following a “rigorous tender and due diligence process”.

The $124 billion super fund is pretty proud of its direct property portfolio, which now includes 66 acres of prime development land once used to manufacture dynamite. But it doesn’t want to take on the risks that come with heading overseas.