Analysis

The complexities of investing in the emerging markets set have been compounded by the Your Future Your Super test. But they’re still a more likely source of growth than their developed market counterparts.

As a forty-year long bull run fuelled by cheap money screams to a stop, markets are at an inflection point. This time really could be different.

In the murky world of data – particularly murky with ESG and climate information – blending quantitative techniques and fundamental research is shedding new light for investors.

An uncertain market outlook beggars a fundamental rethink of investment strategy. But institutional investors are sticking with what worked in the past, even when they know it won’t work in the future.

Looking at the real-world consequences of ESG investments should boost risk-adjusted returns and avoid greenwashing. “Get to the nuts and bolts of the investment,” John Green advises super funds.

There are a range of factors that will determine the fees a member will pay. The difference could have a dramatic effect on the final balance of a retiree’s nest egg.

“Most of the new capital that’s come into the markets… has been chasing fads,” says David Chan, portfolio manager at MLC Private Equity. “The latest hot opportunity, whether it be an unprofitable tech company that’s growing very rapidly, or a very large scale buyout that’s the headline of tomorrow’s AFR.”

As funds exit regulatory deadlock and a generation of superannuants enter the retirement phase, super will need a new wave of thinkers to argue some of its toughest debates.

Industry superannuation has, for the most part, been a roaring success. But it needs to retain its “missionary zeal” if it’s to avoid the same fate that befell the other giants that once dominated the landscape.

Renowned fund manager Jeremy Grantham has warned investors to prepare for an “epic” blowout with the recent market resurgence following the script of previous “superbubble” implosions.

As other infrastructure investors have grown in size, they’ve begun to overlook the midmarket, leaving a hole in the portfolios of asset allocators.

The Albanese Government has begun to explore the potential negative impacts of super fund consolidation. The question is whether a super fund can ever be too big to fail.