Resilience is not optional, it’s strategic

My name is Jamie Bonic and on behalf of IFM Investors, and National Australia Bank, welcome to our series on Superannuation issues and challenges. I'm joined today by James Bulfin, Investment Director at IFM Investors and Rodrigo Catril, Senior FX Strategist at National Australia Bank.

Rodrigo, portfolio resilience is a really constant theme with superannuation funds, particularly given geopolitics, regulatory change, inflated asset prices. So how do superannuation funds navigate these changes?

Yes, I think it's important to realise, particularly when you think about geopolitics, there are now an important component in terms of you’re investment thinking. Maybe 10 years ago geopolitics wasn't as important but certainly in recent times, and when we look ahead gepolitics is very important. The idea of you know reindustrialisation, militarisation as well as physical dominance, again are thematics that we think are here to stay. And therefore, it imposes a different way of thinking for superannuation funds in terms of their investment strategy.

There's a lot greater focus on downside risk, whilst at the same time this needs to be nimble and flexible as the world changes and these dynamics impose different changes for investment strategies.

Thanks Rodrigo, and James, how do I IFM support superannuation funds during these times of heightened change?

It's really about liquidity risk management strategies. The challenge is manageable with the right tools and framework in place. At IFM, we've been managing currency risks associated with longer dated illiquid assets for over 15 years using our strategic hedge framework. And were owned by Australian superfunds. So, we understand trustee challenges deeply and have lived through the complexity of managing currency risk for longer dated illiquid assets. At IFM, our treasury team has been working with superannuation funds, asset consultants and regulators on developing solutions to this issue over the past 18 months.

The plan is to keep a dynamic hedging strategy in place as your portfolio evolves overtime.

Thanks everyone for joining us. NAB and IFM are longstanding partners working with the superannuation industry, helping to develop tools and strategies to assist you manage risk, liquidity and currency exposure.

So thanks for joining in. Hope you enjoyed the series.