Sunsuper switches Vanguard with State Street for passive investments

Sunsuper has appointed State Street Global Advisers (SSGA) as its new passive investment manager, replacing Vanguard Australia.

The move followed Vanguard’s announcement last year that it would discontinue its management of certain superannuation fund mandates as it pursued higher-margin services for retail investors in Australia and New Zealand.

It had also been reported the move was to avoid conflicts of interests in the lead up to its launch of an Australian super fund.

SSGA would manage Sunsuper’s passive strategies in Australian shares, international shares – developed markets, international shares – emerging markets, Australian listed property, global listed property, Australian fixed income and global fixed income.

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Sunsuper’s annual report for the 2020 financial year showed Vanguard managed $20.7 billion of Sunsuper assets.

Sunsuper head of public markets, Greg Barnes, said the appointment tapped into SSGA's long history and experience in managing index portfolios.

“Following an extensive due diligence process supported by an independent, external consultant, Sunsuper has appointed SSGA as the most appropriate manager for our passive investment strategies for our 1.4 million members going forward,” Barnes said.

"There won't be any change to Sunsuper's passively managed investment options, including investment options' objectives, asset allocations and fees."

He said Sunsuper had a strong history with SSGA in listed equities, fixed income and cash and that State Street had been a long-serving transition manager and custodian for the fund.

“We believe that SSGA will offer world leading capability, flexibility and alignment that should enhance overall investment outcomes for our members in the future,” Barnes said.