Australian super funds are experiencing a shift in rankings, with industry funds gaining momentum while government schemes are facing setbacks. Industry funds are seeing growth in member inflows and expansion through consolidation, whereas government funds are struggling due to ageing memberships and conservative strategies.
Leading the pack is AustralianSuper, maintaining its position as the largest super fund in Australia and ranking 17th globally with US$212.4 billion under management. Australian Retirement Trust (ART) follows closely behind at 22nd place with US$186.6 billion, while the Future Fund has slipped to 27th with US$147.2 billion.
Notable industry funds in the rankings include Aware Super at 43rd, UniSuper at 57th, and Hostplus at 76th. The divide between industry and government super funds is stark, as indicated by a recent study conducted by the Thinking Ahead Institute in collaboration with Pensions & Investments.
According to Ellie Boston-Clark from WTW, industry funds have shown modest growth with minimal declines in rankings, attributed to strong member inflows, consolidation, and aggressive investment strategies. On the other hand, government funds have contracted due to maturing memberships, lower contributions, and conservative asset allocations.
Furthermore, the report revealed that Australia boasts 15 funds in the global top 300, including Cbus, Rest, HESTA, CSC, GESB, State Super, Super SA, ESSSuper, Equip Super, and Brighter Super. Technology has emerged as a key theme, with many top funds globally prioritizing AI in portfolio management for efficiency and governance improvements.
AustralianSuper highlighted the impact of technological advancements, particularly in AI, on economies and investment strategies globally. The fund emphasized the growth opportunities presented by this technological boom.
Globally, pension funds managing the largest 300 funds now oversee a record US$24.4 trillion in assets. Norway’s Government Pension Fund has surpassed Japan’s Government Pension Investment Fund as the largest, holding US$1.77 trillion. The concentration of assets at the top continues, with the largest 20 funds controlling 42.4% of the global total.
North America has increased its share of global pension assets to 47.2%, while Asia Pacific’s share has slightly decreased to 25.5% and Europe’s to 23.7%. Jessica Gao from the Thinking Ahead Institute noted that macro-economic volatility and geopolitical shifts are reshaping return expectations for pension investors.
The landscape of superannuation funds is evolving, with industry funds thriving on innovation and growth strategies, while government funds face challenges in adapting to changing demographics and market dynamics. As technology continues to reshape the investment landscape, super funds globally are navigating new opportunities and risks to deliver optimal returns for their members.
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