AUSCOAL Super, an A$7.9 billion (US$7.1 billion) Sydney-based superannuation fund, shifted an existing currency mandate with State Street Global Advisors to an active “dynamic” hedging strategy from a passive overlay program focused on hedging AUSCOAL's more than A$1.6 billion exposure to international equities.
The move reflects a decision by the AUSCOAL board and the fund's investment team “to manage currencies more dynamically through the business cycle,” Michael Berry, senior portfolio manager at AUSCOAL Super, said in a State Street news release Tuesday.
The new strategy will help AUSCOAL Super “further diversify its portfolio and maximize returns while reducing currency risk,” Peter Mitchell, SSgA's director of distribution, said in the release.
In an emailed response to questions, a Sydney-based SSgA spokeswoman said AUSCOAL joins other institutional investors in Australia who together account for US$10.7 billion of the roughly US$16.5 billion in SSgA's "dynamic strategic hedging" strategies. The recent volatility of the Australian dollar has found Australia-based clients wanting "to take greater control of their hedging policy by being more dynamic and proactive about their currency decisions," she wrote.
A spokeswoman for AUSCOAL, which focuses on the retirement needs of employees in mining-related industries, couldn't immediately provide further information.
