Most Australian super funds are managing their asset allocation in-house with relatively few using the services of external asset allocation managers, according to a survey by Melbourne companies Atchison Consultants and Graham Cocks & Company.
The survey, which examines the approach of over 100 super funds to asset allocation in the current low returns environment, reveals that the majority of super funds manage their asset allocations in-house.
It also found that most funds adopt some form of rebalancing to ensure that their asset allocation does not vary too much from benchmark. However, many funds use some discretion in these asset allocation rebalancing decisions.
“In most funds, the board of trustees takes direct responsibility for asset allocation decisions, although often that decision is shared with an investment committee or internal executive,” the report says.
According to the survey, the majority of funds consider a medium term time frame of six months to three years when making asset allocation decisions, although sizeable minorities focus on either shorter or longer-term time horizons.
