Super

Hostplus CIO Sam Sicilia believes the trillions of dollars washing around super could be put to good use in nation-building projects – and that criticisms of investing in unlisted assets are an “absurdity”.

Overseas, Australia’s biggest super fund is a small fish in a massive pond. To achieve the scale it wants it will have to dive deeper into the private markets, meeting stiff competition from its North American peers along the way.

“If you don’t know where you are in a bear market, then you should be in the game… We get asked: ‘is it too late?’ Our view is that it’s never too late to think about defensive strategies.”

“The industry should not be happy to simply sit somewhere in the middle… Increased transparency will drive increased analysis and action. If you can’t measure it, you can’t improve it.”

The spectre of early release still looms large over the industry, and super’s true believers want its purpose legislated to prevent Australia’s retirement savings from becoming a crisis piggy bank.

Allocations to unlisted property, diversified fixed interest, Australian and international shares had the greatest impact on whether an option passed the test or not.

Dotted with various government funds, the Pacific Islands has emerged as a competitive space for NZ and Australian-based investment advisers.

Consolidation among superannuation clients is changing the nature of Citi’s business with them, and increased appetite for nation-building in Australia means plenty of opportunities in private markets.

Super funds are increasingly adding thematic passive products to their self-directed investment options as they face new competition from Gen Z focused start-ups – but the ultimate theme is still on the outs.

Australian Retirement Trust (ART) and QIC are continuing the trend of big funds investing in affordable housing, working in conjunction with community housing provider Brisbane Housing Company.

A big chunk of super funds are now in “limp mode” as their buffer against the performance test evaporates. And sustainable investing is getting harder when even tobacco exclusions eat up the tracking error budget.

Super fund members have been “spared the worst”, while the outperformance of the top ten funds was generated by active management and chunky allocations to private markets.