Superannuation trustees should be unconcerned about short-term liquidity given the multi-decade investment timeframes of their members, says Aberdeen Standard Investments.
Speaking at the Calastone Connect Forum in Sydney this week, Aberdeen Standard Investments Australia managing director Brett Jollie said short-term liquidity should not factor into the major asset allocation decisions of super funds.
Super funds in Australia have members with 20-, 30- or 40-year timeframes, and as a result should not be concerned with short-term liquidity issues, Mr Jollie said.
If pension funds can get a "liquidity premium" from making a particular investment they should take up the opportunity, he said.
"If you can get a yield kicker through that and the potential for capital gains, then that's a great thing to do," Mr Jollie said – adding that the Australian investment industry in general is "too focused on short-term returns and investments".
Australians also need "better financial advice", he said.
"In a defined contribution system where we have investor choice and pension portability, the idea that you would switch your investments because markets dropped 2 per cent tomorrow is ludicrous," Mr Jollie said.
"We need to be taking longer term asset allocation decision[s]. We need to understand the risks of investing and the risks of retirement – longevity, inflation and sequencing – we need to think longer term.
"This deluge of data we that we get daily is just noise – we need to push that aside."
The National Australia Bank has announced an end to its ‘Introducer’ payments program to take effect in October 2019. ...
Westpac has revealed that its cash earnings in the first half 2019 will be reduced by an estimated $260 million due to the cost of its custo...
A local mortgage lender specialising in non-residents is being wound down and will not proceed with any loan applications lodged after 18 Ma...