Alternatives for Super tough times
Industry fund Sunsuper has almost doubled its allocation to alternative investments to 15 per cent in the expectation of tough times ahead.
And chief executive officer Don Luke said the company wasn’t alone in fearing the recent bull market may be on its last legs.
He said the company will reduce its allocations to fixed interest and core property in favour of opportunistic property, private equity, infrastructure, absolute return funds, and a broader allocation to long-short international equities.
“It remains a very competitive market and achieving value, adding performance, is getting tougher… These new portfolio enhancements aim to provide greater diversification and give our members even more opportunities to access greater upside over the long-term, while maintaining suitable levels of risk,” he said.
The move is part of a broad strategic asset allocation review by the fund’s investment consultant Russell Investment Group.
Several changes have been made to the company’s five diversified fund options, including an increase in the allocation to alternative assets for the conservative, moderate, balanced and growth options; changes to the growth/defensive asset splits; a more evenly spread investment mix across diversified investment options; and an expansion of the use of manager skill strategies such as tactical asset allocation and active currency.
Full details of the review will be finalised over the coming months for rolling-out in 2006.
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