Australian superannuation funds outstrip global peers
The relative buoyancy of the Australian economy, combined with the compulsory nature of the superannuation guarantee and the continuing consolidation of the Australian superannuation industry, saw asset growth outstrip that of other nations last year.
That is the bottom line of new research released by Towers Watson, which found that growth in assets of major Australian institutional funds grew by 26 per cent last year in US dollar terms, compared to a global growth rate of 11 per cent.
Commenting on the survey findings, Towers Watson Australia senior investment consultant Martin Goss said the growth rate for Australian funds in the global 300 ranking over the past five years had been supported by a number of factors, including ongoing merger activity, positive net cash-flows, and the seeding of the Future Fund in 2006.
He said other factors had been the strong performance of Australian equities relative to global equities, combined with the home country bias of many Australian investors and the appreciation of the Australian dollar relative to the US dollar and the Euro. According to the Tower Watson data, there are 15 Australian funds in the global 300 ranking this year, with all of them climbing the ranks as a result of strong growth in funds under management - giving them a combined asset size of US$368 billion.
At the top of the tree for Australia is the Future Fund (ranked 35th globally), followed by AustralianSuper (78th), State Super (93), QSuper (99), UniSuper (105), First State Super (154), ARIA (159), REST (160), Sunsuper (175), Hesta (179), ESSSuper (189), Cbus (191), SuperSA (253), GESB (268), and Telstra Super (274).
Goss said Australian funds were expected to maintain their growth trajectory.
Looking globally, Goss said the world's largest pension funds had changed their asset mix during the past five years to be more defensive - partly due to ongoing volatility and an unpredictable growth environment - with the top 20 funds (on average) now having equal amounts of equities and bonds, and the rest being in alternatives and cash.
AUTHOR
Mike Taylor
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