Asset Super has embarked on what it is describing as a non-traditional investment strategy without increasing its overall exposure to risk.
The fund’s chief executive officer, John Paul, said that, amongst other things, the fund was moving from active Australian bond investments to purely passive bond investments because it felt better returns on fees could be generated by investing differently.
Paul said the moves were in line with the fund’s desire to seek out additional value for its members while remaining within its established risk budget.
“We are moving from active Australian bond investments to purely passive bond investments as it’s felt that the additional cost of active bonds is not being rewarded by a sufficiently higher return relative to passive bonds management,” he said. “It is the same story in Australian Listed Property Trusts.”
He said Asset Super would also shortly introduce a new $55 million Global Tactical Asset Allocation investment via Intech — a move that would help balance the risk across the fund’s blended investment portfolios.
Paul said overall, Asset Super would reduce its current Australian equities portfolio by $26 million, its international shares by $31 million and Australian bonds by $67 million and reinvest via the following new mandates — SSgA International Bonds ($16 million), Vanguard Australian LPT ($2 million), International LPT Lasalle/Perennial ($39 million), Global Tactical Asset Allocation ($55 million) and Cash Macquarie ($12 million).
He said the fund would also transfer its Australian Listed Property Trust investments, currently SG Hiscock and Credit Suisse, to Vanguard’s ALPT, representing a total of $58 million.
