QSuper fund tumbles as markets fear overreaction from central banks

Australian Retirement Trust’s QSuper balanced accumulation fund fell by 5.15 per cent for the 12 months to the end of September.

Nov 02, 2022, updated Nov 02, 2022
EML's troubled Irish business has lost its entire board

EML's troubled Irish business has lost its entire board

Some of its other options have had heavier falls. Its Lifetime Focus 3 fund, which is aimed at 50 to 57-year-olds, dropped by more than 6 per cent for the year to the end of September, well below its 10-year objective of 3.5 per cent above inflation.

The QSuper balanced fund invests more in unlisted assets such as infrastructure and has a lower exposure to equities than traditional funds and ART said it had outperformed its return objective over the past 10 years

ART’s latest investment report said markets were concerned that central banks, like Australia’s Reserve Bank, would “overdo” efforts to curb inflation by raising rates too far and ultimately triggering a global recession.

“The challenge facing the world’s central banks is an extraordinarily difficult one. Further cash rate increases, both here and in Australia and elsewhere are almost certain, although there are signs here in Australia that the RBA is slowing the pace of rate increases,” the report said.

However, ART said it did not see a global recession as inevitable and it did not design portfolios on short-term economic, market or geopolitical forecasts.

Despite this, ART said it had made adjustments to its asset allocation and reduced its weighting in commodities and equities which it said reduced losses.

“The bond exposure was significantly reduced after the initial Covid-19 outbreak in 2020 when long term interest rates had fallen very close to zero,” the report said.

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“Through the September quarter, with interest rates and potential forward return from fixed income higher, the portfolio’s allocation to bonds was increased slightly.”

The fund also holds significant levels of foreign currencies, but reduced the level slightly during the September quarter.

ART was also part of a consortium that bought a stake in VicRoads, the Victorian Government’s motor vehicle registrations, licencing and customs plates business. It also sold 50 per cent of its interest in United States Infrastructure Corporation “providing a meaningful return of capital to ART members.


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