Cbus Super plans to boost investments in private debt, concerned that stocks have rallied too far too fast and traditional bonds are offering meager returns.
The Melbourne-based superannuation fund is targeting loans for real estate developers and for infrastructure projects such as airports that are offering high-single digit returns, according to its chief investment officer.
The year ahead "is going to be challenging," Kristian Fok said in a phone interview, adding the plan remains cautious on the outlook for equity markets. Predicting where stocks go from here "is really difficult because it will be influenced by policymaking, central bank responses and so forth."
The super fund, which manages A$54 billion ($37 billion), is set to eek out a small gain in the 12 months to June 30 after equities rebounded in recent months as governments worldwide step up spending to cushion the blow from the COVID-19 shutdown. The fund's default investment option has more than half its portfolio allocated to Australian, global and emerging market stocks, according to its website.