Superannuation funds are moving away from their traditional asset allocation of 70 per cent in equities and 30 per cent in bonds, and are adopting a more dynamic strategy across multiple liability-oriented buckets, according to a report by Create Research.

"In the wake of the GFC [global financial crisis], there is more soul searching about asset allocation in Australia than any other country," Create project leader Professor Amin Rajan said.

"The weaknesses of the old 70/30 equity-bond formula chasing relative returns have been exposed dramatically in the past four years."

Rajan said super funds were now considering more dynamic approaches that targeted the consumer price index plus 3 per cent.

"The key challenge for the supers now is twofold: they need to de-risk their portfolios that have long been weighed down by equity risk; they also need to find smarter ways of investing that deliver absolute returns at times when simple cash products fetch around 5 per cent," he said.

Super funds were looking back to the old-style, multi-asset, balanced mandates, which were being readapted under the guise of diversified growth funds, he said.

In this new liability-focused framework, growth assets, including equities and alternatives, would only take up 50 per cent of the total portfolio, he said.

However, Principal Global Investors Australia chief executive Grant Forster said the process of de-risking could take some time to unfold.

"Now is probably not the right time to go from 60 or 70 per cent equities down to whatever number," Forster said.

"Sovereign bonds are clearly expensive."

But over time, the allocation to equities will come down as funds start to use a wider variety of more liability-focused buckets.

"The global equity benchmark plus 1 per cent alpha; that business is just dying," Forster said.

"In Australia we have seen some very large asset managers who haven't changed from that benchmark class and they are suffering."