Australia has the world's riskiest superannuation system - Chris Joye. Equity exposure too high

November 3, 2017

In this article http://www.afr.com/opinion/columnists/peter-costellos-future-fund-could-revolutionise-super-20171102-gzdyo1 , Chris Joye points out:

  • This is precisely why Australia has ended up with the world's riskiest pension system. The OECD's latest analysis finds that of the 34 developed countries it evaluates, our super funds have the second highest portfolio weight (51.1 per cent) to equities, which is more than five times larger than the median weight of 10.7 per cent.

  • The great counter-factual in this debate is the Future Fund. Whereas Australian Super's "balanced" fund has an enormously concentrated and correlated 84 per cent allocation to Aussie shares, global shares, property equity, private equity, and infrastructure equity, the Future Fund's weight to these sectors is only 56 per cent even though it has a slightly higher return target.

 

The Future Fund, in contrast to most Australian Superannuation Funds, is not overly exposed to equities.   http://www.futurefund.gov.au/investment/investment-performance/portfolio-updates 

 

 

 

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