Analysis

Australia’s super funds have been leaders in adopting private markets investing, but they’ve still got a long way to go. Overcoming the obsession with liquidity will be one hurdle, says the boss of $900 billion private markets manager Hamilton Lane.

Performance concerns for sustainable investing have risen to the fore as the Your Future Your Super (YFYS) test shortens investment horizons. The wider return outlook is more challenged too.

The end of supportive monetary policy is bringing wild market volatility with it, and the old impulse to “buy the dip” will no longer be rewarded.

Institutional funds and their managers tend not to talk about tactical bets, at least not in public. It’s a long-term game after all. But there are times when short-term opportunities can also match long-term strategies. Take China, for instance.

While the publishing of retirement income strategies is a big step forward into super’s new frontier, many of those strategies are based on a “very unsafe foundation.”

While passive investment strategies are now used to manage the majority of equities, the absence of active managers would only create a “mindless boom and bust.”

Proxies for risk capital are dipping, with long-term implications for financial market returns. The question is whether this will be a repeat of the Covid Crash or a repeat of the Tech Wreck.

Central bankers are hoping to subdue the inflation beast by the end of the calendar year. But it will likely be around for decades to come.

The world’s state-owned investors (SOI) have made progress in leaps and bounds on governance and sustainability. Locally, the Future Fund and NZ Super lead the way.

The performance test as it stands isn’t “fit for purpose” when it comes to choice products. And its bright line nature means tweaks are needed for MySuper products too.

Everything old is new again amidst an inflation/rate/war driven synchronised selloff. But lessons from the 80s are still applicable today.

While Australia’s super funds have gradually increased their allocation to alternative investments as public market return expectations fall, new research questions whether that’s the best approach.