Weak dollar dampens super fund rankings

A weakening of the Australian dollar over 2013 saw Australian super funds slide down the ranking of the world’s largest 300 pension funds, research showed. 

The Pension and Investments/Towers Watson Global 300 research showed that while Australia did add one new fund to the survey with HOSTPLUS taking 290th spot, most Australian funds dropped in rankings. 

“There was a 14 per cent fall in the Australian dollar relative to the U.S. dollar, and that has contributed to Australians funds dropping in this year’s ranking, by six places on average, with only AustralianSuper and UniSuper moving up the rankings (by seven and two places, respectively),” Towers Watson Australia senior investment consultant Martin Gross said. 

Among Australian funds, Future Fund came out on top, ranking 31, down from last year’s 29, with assets totalling $92.08 billion. 

AustralianSuper ranked 47, up from last year’s 54, with assets totalling $69.59 billion while UniSuper ranked 102, up from 104, with assets totalling $38.54 billion. 

Funds including REST, HESTA, Sunsuper and Cbus have dropped five places on average. 

The research showed defined benefit funds make up 67 per cent of total assets, down from 75 per cent five years ago. During 2013, defined benefits assets grew by around 3 per cent, compared to reserve funds (15 per cent), defined contribution plans (over 9 per cent) and hybrids (over 8 per cent). 

“Most funds are unlikely to get adequate returns from the market in the coming year and will need to work hard in 'added-value spaces’ to find the couple of extra per cent per annum they need,” Gross said.  

“Investors will need to be well organised to deliver this and it will likely involve a substantial shift in focus away from security selection in equities and towards capturing returns from alternative markets and strategies.”