The continued growth and scale of Australia’s $3.5 trillion[i] superannuation system offers a significant opportunity today as Funds deploy capital in offshore markets, with a focus on diversification and long term returns for their members.

In June, NAB is opening its 11^th biennial Superannuation Currency Hedging Survey to explore in detail major industry drivers and themes emerging for Australian Superannuation Funds.

The survey is the only one of its kind in Australia and looks at how major Funds are managing their currency exposures in today’s complex investment environment.

Areas of particular interest this year include asset allocation, liquidity management tools, currency risk in emerging markets, and the impact of changes to the Your Future, Your Super (YFYS) performance test. This year’s survey will also explore the increased focus on environmental, social and governance (ESG) factors, while understanding how Funds intend to transition to net zero.

NAB’s Head of FX Investor Sales, Global Markets, Jamie Bonic says the ongoing trend for Funds to seek greater yield and diversification through offshore investing highlights the importance of managing the related currency exposure.

“The survey is an initiative NAB has committed to for more than 20 years as part of the bank’s expertise in managing currency risk for investors and contributing to the success of Australia’s superannuation system,” Bonic says.

“It examines what peers across the industry are doing in detail to provide insights on managing currency exposures across portfolios on behalf of members.”

ASFA Chief Executive Officer Martin Fahy says the NAB FX survey is unique in Australia and provides valuable insights into the important trends across the industry.

“For two decades now, the NAB survey has provided clarity and insights into how Australian Superannuation Funds manage their currency exposures,” Fahy says. “The level of detail on currency positioning, decision-making processes, hedging products and the impact of regulatory changes enables funds to assess their practices against industry peers.

“Given the ongoing increase in exposure to international assets, FX considerations have never been more important. We look forward to seeing the results of the 2023 NAB survey.”

Participating Funds will receive an exclusive access opportunity, including an individual results breakdown and deep dive into the data to enable benchmarking against peers.

Members of the NAB FX team will be contacting Funds shortly with the questionnaire for the 2023 survey. All answers received are confidential and are only used for aggregated industry insights.

[i] Super Statistics – ASFA (superannuation.asn.au)