UniSuper Management, the third-best performing Australian pension fund over 10 years, plans to buy more emerging Asian equities as the region's economic outlook improves.
With company profits set to revive, the Melbourne-based pension fund is starting to see value in the region, Chief Investment Officer John Pearce said in an interview. UniSuper manages A$41 billion ($38 billion), mostly on behalf of Australian university employees.
“Our latest tactical shift has been to put more money into Asia,” he said. “We had a big overweight to Asia a few years back and then gradually wound it back. Once again, we are thinking of increasing our exposure to the region.”
Australian pension funds, which manage A$1.8 trillion, are putting more money offshore as they outgrow a domestic equity market dominated by a handful of industries. The MSCI Asia Pacific ex-Japan index has returned 8.6% this year through Aug. 15, compared with a 3.2% gain for the MSCI World index.
Asia currently makes up 20% of the fund's holding of global equities, down from 40% three years ago, Mr. Pearce said.
UniSuper invests in Asia through external fund managers and avoids other emerging markets such as Eastern Europe, Africa and South America, said Mr. Pearce.
UniSuper had an average rate of return of 8% in the 10 years ended Dec. 31, behind Commonwealth Bank Officers Superannuation Corporation at 8.1% and BEST Superannuation at 10.5%, according to Australian Prudential Regulation Authority data.