AustralianSuper may have written down the value of some of its unlisted assets, but it is still telling members that unlisted assets are weathering the current volatility better than listed share markets.
In information directed to members, AustralianSuper has pointed out how well its balanced option has performed when compared to the broader market, due to its diversification.
“AustralianSuper’s balanced option (where most members are invested) includes exposure to growth assets like listed shares, and defensive assets like fixed income, foreign currency and cash as well as unlisted assets such as infrastructure, property and credit, which provide both growth and income. It currently has just over half its portfolio invested in listed shares.”
“This structure helps to reduce the impact of negative market movements on your returns, while providing long-term growth, just like the significant growth members have enjoyed over the last 10 years,” the fund’s communication to members said. “As you can see in the chart below, while Australian and global markets have fallen 20.9% and 12.7% respectively since the start of this financial year to the end of the March quarter, the balanced investment option has only fallen by 6.45% in comparison.”
“The current fall in listed shares is being moderated by the allocations to fixed income, cash and foreign currency, as well as the exposure to unlisted assets such as infrastructure, property and credit – which typically exhibit lower levels of volatility than listed shares across economic cycles,” it said.
“While COVID-19 is having an impact on the values of these unlisted assets, the falls are relatively lower compared to what we’ve seen in listed share markets.”