One of Australia’s largest pension funds, A$149 billion ($89.6 billion) UniSuper, has upgraded its probability of a US recession and plans to cut its exposure to the country in the wake of President Donald Trump’s tariffs and the resulting market chaos.
“Medium-term, I think there are big asset allocation decisions to be made,” UniSuper Chief Investment Officer John Pearce said on a podcast produced by the fund.
“Like every other fund in Australia, we have quite a large exposure to U.S. assets, and that’s been a very good place to be investing over the last couple of years, particularly given the U.S. tech story,” he said.
“We’ll be questioning that commitment. Frankly, I think we’ve seen peak investment in US assets.” Pearce said. “Donald Trump is turning out to be horrible for business.”
Australia’s A$4.2 trillion pension industry typically has around a third of its portfolio in global equities, with a sizable chunk of that invested in the U.S. market. Top funds including UniSuper were in the U.S. in February, looking to push deeper into the market as an investment destination, particularly in private assets.
Pearce said a recession was now more likely, without mentioning a specific likelihood, saying tariffs are bad for global trade and U.S. consumers.
“This is going to effectively be a tax — a consumption tax — on the US consumer,” he said.
Pearce said the fund had enough cash available so it could meet commitments “as they arise without having to liquidate any assets in crumbling markets.”
