Kirby Rappell

For the fourth consecutive year, superannuation funds have delivered strong returns to their members, with leading superannuation research house SuperRatings estimating that the median balanced option returned 1.2% over the month of June, bringing the return for the year to 30 June 2026 to an estimated 9.1%. This result arrives largely off the back of the strong performance of international share markets, whilst Australian markets delivered a more modest gain.

Despite the strong headline result, investors have experienced considerable ups and downs over the course of the year. In the nine months to 31 March 2026, the median balanced option had returned just 2.8%, as the outbreak of conflict between the US and Iran weighed heavily on investment markets. However, as the situation in the Middle East saw signs of stabilising, and the growth of AI continued, international shares regained ground, driving funds toward a rapid recovery in the final quarter of the financial year. Standout performers within the international shares sector included chip, storage and other hardware manufacturers supplying companies involved in the artificial intelligence sector.

Director of SuperRatings, Kirby Rappell, said “This year was characterised by considerable market volatility, especially following the outbreak of the US-Iran conflict in March, which placed pressure on super fund performance. However, we once again saw the benefits of staying the course, as funds delivered strong performance to close out the financial year.”

The median growth option exhibited an estimated a 1.3% return over the month, while capital stable options, which hold more traditionally defensive assets such as cash and bonds, returned 0.9%.

Pension returns also ended the financial year strongly, with the median balanced pension option up an estimated 1.3% over June. The median growth option rose by 1.4%, whilst the median capital stable option is estimated to deliver a 1.0% return for the month.

With the key driver of performance continuing to be international, and particularly US, shares the policy decisions of US President Trump have significantly impacted fund returns since taking office. During the shocks of the Iran conflict and with ongoing threats of tariffs following ‘Liberation Day’, members may have seen their super balances decline over shorter periods of time. However, if they have remained invested in the median balanced option, they would have received an estimated 13.4% return over the initial 18 months of the second Trump presidency (Trump took office on 20 January 2025, returns are calculated from 1 January 2025 to 30 June 2025), further underscoring the importance of maintaining an investment strategy in the face of short-term market shocks.
Superannuation returns 1 January 2025 to 30 June 2026

Mr Rappell commented “Despite considerable market volatility, super funds have continued to perform strongly. Looking ahead there remains uncertainty around market performance over the next 12 months, including whether anticipated productivity gains from AI will translate into economic and corporate growth. In Australia, persistent inflation remains a concern, with recent RBA rate increases underscoring the ongoing challenge. If inflationary pressures persist, they could act as a headwind for Australian markets and investment returns.”

​​Super fund performance resilient amid market volatility

The chart below shows that the average annual return since the inception of the superannuation system is estimated to be 7.3%, with the typical balanced fund exceeding its long-term return objective of CPI+3.0%.

Global share markets were the key driver of super fund returns in FY2026, marking a fourth straight year in which listed equities underpinned performance. Investor enthusiasm for AI remained strong, with technology infrastructure and hardware manufacturers benefiting the most from the AI investment boom, replacing the traditional ‘Magnificent Seven’ technology stocks which drove returns over previous years as the standout performers for FY2026.

In contrast, Australian shares lagged their international counterparts with the ASX200 returning 2.8% compared to over 20% delivered by the S&P 500. While mining and commodities stocks generated strong returns, these gains were tempered by weakness in the banking sector, with CBA and NAB shares both finishing the financial year with share prices lower than where they started the year.

Even amid recent market volatility and geopolitical unrest, members can take comfort in knowing their retirement savings continue to grow, with super funds experiencing just four periods of negative returns over the past 34 years.

SuperRatings continues to highlight the importance of staying focused on long-term investment objectives when it comes to superannuation. Despite periods of heightened market volatility, the strong returns delivered over the past four years highlight the benefits of remaining invested. Members who moved into lower-risk options with larger allocations to cash and fixed interest investments during market downturns may have missed out on substantial gains during subsequent recoveries.

With super funds issuing their annual statements in the coming months, SuperRatings encourage members to take this as an opportunity to review their investment strategy, assess their fund’s investment performance, review the fees they are paying and ensure that any insurance arrangements remain suitable for their needs. Members seeking greater clarity or advice should reach out to their fund or a trusted professional financial adviser to understand the support available and any costs for getting advice.

“It’s been another incredible year for the retirement balances of Australians,” said Mr Rappell. “However, with uncertainty lingering and markets sitting at or near record highs, investors should continue to expect volatile returns and temper their enthusiasm for similarly strong performance over coming years.”

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China remains central to the global outlook, but the opportunity set has evolved.

China’s economic trajectory is shifting, but not in the way many had once expected. Consumption-led rebalancing has not materialised. Instead, economic policy continues to emphasise industrial modernisation, aligned with a long-term strategy focused on supply-chain resilience and national security.

Policymakers appear willing to tolerate only a moderate slowdown, with longer-term guidance pointing to lower but more sustainable growth, implicitly anchoring real GDP growth in the low-4% range over the next decade. The 2026 growth target range of 4.5%-5% reinforces room for expansion when it aligns with strategic objectives. What is emerging is not a fundamentally new model, but an upgraded version of the existing one.

This approach has a clear logic, channelling resources toward industrial capability and national self-sufficiency to capture potential tailwinds from technology and trade, while reinforcing economic resilience. But it also means the gap between what China produces and what it consumes is unlikely to close meaningfully. For the global economy and for investors, the gap remains a critical variable.

A policy framework built around national resilience

At the centre of China’s direction is a deliberate set of policy choices. The 15th Five-Year Plan (2026-30) signals an ongoing rotation away from scale-led expansion towards a framework focused on productivity, resilience and technological upgrading. Strategic sectors, particularly artificial intelligence and advanced manufacturing, remain central to this transition, alongside a continued emphasis on reducing external dependencies, particularly in an increasingly contested geopolitical environment.

Demand stimulus serves more as a fallback plan

The FYP does elevate domestic demand as a more prominent growth driver, supported by services consumption, people-oriented investment and social reforms aimed at unlocking household spending. However, the overall framework remains supply-side centric, with no binding targets for consumption, reflecting a reluctance to set firm commitments for structural variables that require broad, long-term reforms.

The FYP includes commitments on income growth, social protection, housing stabilisation and expanded access to public services, all aimed at reducing precautionary savings and encouraging spending.

However, progress has been gradual. These commitments remain largely qualitative and may not be pursued in full if external demand proves sufficient to meet growth targets. Meanwhile, structural constraints, including income uncertainty, insufficient social safety nets and the lingering effects of the property downturn, continue to reinforce a high saving bias.

Notably, services are positioned as a key driver of jobs and consumption, with the State Council projecting the sector to reach RMB 100 trillion by 2030. But even that implies slower nominal growth than the prior five years, and the emphasis is as much on producer services as consumer-facing ones.

As a result, consumption is likely to be supportive at the margin, but not a baseline growth driver over the next few years.

Technology and industrial upgrading are supporting investment

Where policy is most decisive is in its support for technology and industrial upgrading. Investment is being channelled into semiconductors, artificial intelligence, advanced manufacturing and clean energy.

Investment as a share of GDP is gradually declining, but its composition is shifting toward manufacturing, technology and other high-priority sectors. At the domestic level, this helps offset weakness in traditional sectors such as property. Over the medium term, this could support productivity, particularly given increased emphasis on R&D and innovation, helping to offset the structural drag from a declining population and fast-ageing demographics. Regionally, it reinforces demand across supply chains, particularly in Taiwan and Korea’s semiconductor ecosystems.

The global consequence: reinforcing imbalances, not resolving them

The cumulative effect of these domestic choices has clear external implications. A persistent gap between production and consumption means China will continue to rely on exporting goods to the rest of the world as a key engine of growth.

The FYP does signal an intent to rebalance trade. Import expansion, outbound direct investment and rules-based alignment to international standards with trading partners all feature prominently, alongside measures to reduce blanket subsidies and upgrade export product structures. If delivered, these could gradually rebalance China’s growing trade surplus and ease some of the friction with trading partners.

But the gap between ambition and execution remains wide. For now, China’s export share continues to grow. It may also gain tailwinds from a potentially accelerating global green transition given China’s growing strength in electric vehicles, lithium-ion batteries and solar. As we noted in our recent Secular Outlook: Rupture and Resilience^[1], China remains a pivotal player in global fragmentation, an ongoing source of disinflation, and holds significant geoeconomic leverage in international trade and security discussions.

That disinflationary impulse is itself being reshaped by the changing trade landscape. As tariffs reroute goods away from the U.S., the disinflation that once flowed primarily to American consumers is now landing in other markets, particularly in emerging economies. It is a double-edged dynamic: while trade diversion can depress local prices and compete with domestic manufacturing, it also means that inflation across many emerging market (EM) economies is now running structurally lower than U.S. levels for the first time in history. For EM central banks with credible policy frameworks, this creates room to ease and support domestic growth at a time when developed market policy remains constrained.

Geopolitics remains a key variable

If the baseline outlook is one of steady but unbalanced growth, geopolitics is the factor most likely to shift the picture.

Trade tensions and technology restrictions continue to shape the environment in which China operates. The trajectory of U.S.-China relations stands out as particularly consequential, with tariff escalation and export controls creating direct implications for supply chains, corporate earnings and market access. Competition in critical technologies is unlikely to ease, regardless of the diplomatic cycle.

But China’s geopolitical relevance extends well beyond its bilateral relationship with the U.S. As a supplier of green energy technology, a growing exporter of digital infrastructure and technology standards, and a potential architect of alternative payment systems, China is building a network of partnerships that reaches across Asia into the Middle East, Latin America and Africa. This positions China not merely as a trade partner but as an alternative anchor in a fragmenting global order.

This dynamic is central to what has been described as the “middle power moment”. Without a credible alternative to U.S. economic and strategic influence, middle-income countries have limited bargaining power. China’s presence changes that calculus. Countries such as Brazil, for example, can leverage competing demand for critical minerals. The result is a more multipolar landscape in which alliances are negotiated rather than assumed, and in which China’s role as a counterweight is itself a source of geopolitical significance.

Beyond these structural shifts, broader geopolitical developments, from regional security tensions to evolving alliances around trade blocs, can introduce bouts of volatility. This reinforces the importance of active risk management and scenario planning within portfolios.

What this means for fixed income and portfolio positioning

Against this backdrop, China’s domestic bond market has remained notably stable. Banks and other domestic institutions continue to provide a consistent base of demand for government bonds, and the market retains a low-volatility profile relative to other major fixed income markets.

However, the outlook is more nuanced for global investors. Structurally, China remains in a low-rate environment, anchored by weak domestic demand, excess capacity and elevated debt levels. Policy retains an easing bias, even if overall policy space is more constrained. Low yields limit the appeal of Chinese government bonds as standalone investments, and they are often used as funding instruments for higher-yield opportunities elsewhere. The offshore renminbi market is expanding and issuance patterns are shifting as both Chinese and foreign borrowers adapt to changing funding dynamics. Demand for U.S. dollar bonds from Chinese issuers has been strong, driven largely by financial institutions recycling the trade surplus. This favourable technical backdrop may persist, though the spread pickup over comparable global investment grade bonds has narrowed relative to historical norms.

From a currency perspective, we remain constructive on gradual renminbi appreciation, supported by a stronger current account and stated policy intentions to rebalance. However, the RMB is unlikely to outperform meaningfully the appreciation already priced into the forward USD/RMB market.

The investment case for China has changed

China remains central to the global outlook, but the opportunity set has evolved. For investors, this argues for selective exposure to areas aligned with policy priorities, less directional beta, and a focus on relative value across onshore and offshore credit and rates markets.

It also reinforces the case for diversification across both developed and emerging markets. EM now provides important portfolio diversification against the very disruptions emanating from the developed world. In a regime where U.S. fiscal dynamics, dollar rebalancing and developed market policy uncertainty are primary sources of portfolio risk, EM exposure offers a genuine hedge rather than simply an additional source of yield. With China serving as an increasingly significant geopolitical and economic partner for many of those same EM countries, its relevance to the broader investment case only grows.

In a world shaped by imbalance rather than convergence, the case for China exposure remains intact, but it is no longer about broad participation in a growth story. It is about navigating a more complex, policy-driven landscape and recognising that China’s influence extends well beyond its own borders.

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Notes:
[1] https://www.pimco.com/au/en/insights/rupture-and-resilience

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Debby Blakey

HESTA added around $10 billion^[1] in savings and investment returns collectively to members’ accounts over the 2025/26 financial year, with the Fund’s MySuper investment option delivering strong returns through a period of heightened market volatility.

The $105 billion Fund’s MySuper Balanced Growth option, where most HESTA members are invested, delivered 9.46% for the financial year to 30 June 2026. The next largest investment option by funds managed, High Growth, returned 11.09%.

For members, this result has translated into real growth in their retirement savings. A HESTA member invested in MySuper Balanced Growth with an average starting balance of $80,000 will have likely received investment returns of around $7,568 in their account by the end of the financial year.^[2]

This year’s result represents the fourth straight year of annual returns above 9% for Balanced Growth. Over 10 years to 30 June 2026, the investment option has averaged an annual return of 8.29%, ranking in the top quartile over five and 10 years to 31 May 2026.^[3]

Demonstrating the power of compounding net investment returns over the long term, a HESTA MySuper Balanced Growth member starting with $40,000 10 years ago would have likely received around $48,719 in investment returns by 30 June 2026.^[4]

The strong 2025-26 financial year performance is also helping members in retirement preserve their savings as they draw an income stream, with HESTA’s Retirement Income Stream Balanced Growth achieving a return of 10.81% and Retirement Income Stream Conservative yielding 7.04%.

HESTA Chief Investment Officer Sonya Sawtell-Rickson said resilient global sharemarkets were a key driver of strong performance this year, with the portfolio well-positioned to navigate a volatile year in markets.

“Our considered, diversified approach helped us deliver a strong financial year result for our more than one million members amid a challenging geopolitical environment,” Ms Sawtell-Rickson said.

“We were able to manage risks in a volatile environment while also acting quickly on new opportunities that emerged as markets moved.

“With persistent inflation and ongoing geopolitical uncertainty likely in the year ahead, we’re staying focused on investments in areas where we see compelling long-term value, including healthcare, housing, climate solutions and artificial intelligence.”

The returns come as HESTA continues to focus on keeping costs competitive for members. In 2025 the Fund announced reduced investment fees across most of its Ready-Made options in the previous financial year. From 1 July 2026, HESTA reduced insurance fees by an average of 12% across all cover types as part of a broader suite of changes designed to provide more accessible and affordable insurance cover.

HESTA CEO Debby Blakey said the investment returns and fee reductions were great news for members, who continue to bear the brunt of high cost-of-living pressures.

“It’s fantastic HESTA has been able to continue to deliver strong long-term investment performance at a time of ongoing uncertainty in financial markets and as many of our members feel the squeeze from cost-of-living pressures,” Ms Blakey said.

“Delivering strong, long-term returns is fundamental to supporting our members into retirement, and outcomes like these can make a real difference to our members’ hard-earned savings for their financial future.”

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Debby Blakey

One year since super on Commonwealth Parental Leave Pay took effect alongside the super guarantee reaching 12%, HESTA modelling shows just how much these critical reforms can improve women’s retirement outcomes.

For a typical HESTA member who takes Commonwealth Paid Parental Leave^[i] the payment of super can make a meaningful difference at retirement. The Fund’s previous modelling, based on 18 weeks of leave, shows the payment of super potentially adds around $6,500 at retirement. For those who take leave for two children, that benefit increases to nearly $13,000.^[ii]

The first of these super contributions are imminent, with Australians who received Government-funded Parental Leave Pay during 2025–26 set to see this super arrive in their accounts from the Australian Taxation Office following the end of that financial year.

Further modelling^[iii] shows women^[iv] beginning their careers with the full 12% super guarantee in place for their entire working lives could retire with $712,000 – a potential $411,000 boost compared to women modelled to have retired in 2025.^[v]

HESTA CEO Debby Blakey said the one-year anniversary marked a genuine turning point for the Fund’s more than one million members, around 80% of whom are women, many working in typically lower-paid sectors including aged care and early childhood education.

“One year in and we’re starting to see the positive impact these important reforms are having – and will continue to have – on women’s retirement outcomes while making our super system fairer,” Ms Blakey said.

“Women have for too long retired with far less super than men, simply because the system didn’t account for the reality of their lives. These two reforms are starting to change that.”

HESTA had long advocated for the paid parental leave change, which addressed a structural gap that had seen Australian mothers miss out on well over $3 billion in super savings since the Commonwealth scheme was introduced in 2011.^[vi] Meanwhile the lift in the super guarantee is set to deliver compounding benefits over decades.

“This reform will see money flow into the super accounts of mothers who previously would have missed out simply for taking time to care for a new baby,” Ms Blakey said.

“The 12% guarantee means women starting work today could retire with more than double^{[ii, iv]} the amount of super compared to female workers who retired last year.”

Low-income earners are also set to benefit from upcoming Low-Income Superannuation Tax Offset (LISTO) reform, for which HESTA long advocated. From 1 July 2027, the maximum LISTO payment will increase from $500 to $810 and will be permanently linked to personal income tax thresholds, helping ensure low-income earners don’t pay more tax on their super than on their take-home pay.

Ms Blakey said it was important to keep the momentum going on positive super reform, as there was still much work to do to make Australia’s retirement system fairer. She said HESTA is supporting^[vii] research to design a workable model for superannuation ‘carer credits’. This reform is needed to ensure those whose workforce participation is impacted by the need to provide unpaid care can get a better deal in retirement.

“Super on paid parental leave, LISTO changes and the 12% super guarantee should be seen as the foundation for further progress, not the end. There are still policy settings that disadvantage women and those on lower wages, and HESTA will keep advocating to ensure the system works for everyone,” Ms Blakey said.

——–

Notes:
[i] Commonwealth Paid Parental Leave was up to 24 weeks in the 2025-26 financial year, extending to 26 weeks from 1 July 2026.
[ii] Modelling prepared by Laneway Analytics in 2024, commissioned by HESTA. This is a forecast and is predictive in nature and as such the outcome cannot be guaranteed and may be different. Key assumptions used in the modelling include a retirement age of 67; AWOTE 3%; CPI 3%; investment return rate (real) 3% (above CPI figures, net of investment fees and taxes); investment return rate (nominal) 6%; wage growth (HESTA derived per industry as at 1/3/22); 32 weeks spent away from workforce (per child); age of mother 30, 32 and 34 for child 1,2,3 respectively. The modelling scenario assumptions are for an average HESTA member per industry, and include assumptions around current super balance, recent super guarantee activity, voluntary contributions (pre- and post-tax) and insurance premiums. Estimates on retirement amounts are in today’s dollars.
[iii] Modelling prepared by Laneway Analytics in 2025, commissioned by HESTA. This is not a prediction, is for illustrative purposes only and as such the outcome cannot be guaranteed and may be different. The modelling made assumptions including: Begin career at age 18; Retirement age 67; AWOTE: 3.7% pa; CPI 3.7% pa; Investment return net of investment fees and taxes CPI +3% pa; 18-year-old HESTA member account balance $1500; 18-year old HESTA member total contribution $1543 for first year of work, then contributions made annually thereafter based on HESTA’s assumptions around salary progression; Default insurance cover (premiums CPI-adjusted); Accumulation fixed fee $52 pa (non-indexed); Accumulation variable fee 0.15% pa (non-indexed); Full-time work at ages 18 to 30, 44 to 67; 26 weeks of super on Paid Parental Leave at ages 31 and 33; Part-time work (0.6 FTE) at ages 34 to 43; No other retirement savings.
[iv] Women representative of the average HESTA member.
[v] Compared to the Estimated Retirement Amount ($301k) for a typical HESTA member who started their career on 1 July 1976 and will retire on 30 June 2025, earning 3% super starting 1992 and taking account of historical super guarantee increases. Estimated Retirement Amount for a typical HESTA member who started their career on 1 July 2025 and will retire on 30 June 2074, earning 12% super is forecast to be $712k.
[vi] Modelling by Laneway Analytics (dated February 2024) estimated the benefit to Australian women as of 31 December 2023 ($3.3 billion) if superannuation had been paid as part of the Commonwealth Parental Leave Pay scheme since it was introduced on 1 January 2011.
[vii]With other profit-to-member funds, coordinated by Women In Super.

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Eric Souders

Despite heightened geopolitical tensions, persistent inflation concerns and ongoing uncertainty around US monetary policy, fixed income continues to offer compelling risk adjusted return potential heading into the second half of the year, says Payden & Rygel managing director and portfolio manager, Eric Souders.

Markets have been forced to navigate a much more complex environment than many expected at the start of the year, Souders says.

“The US economy remains remarkably resilient, supported by strong consumer spending and what appears to be a generational upswing in investment, driven by AI infrastructure and power demand.”

While inflation has moderated from peak levels, he expects it to remain sticky and volatile in the near term.

“Our expectation is that inflation should trend lower over the next six to 12 months, but the path is unlikely to be smooth.

“The challenge for markets is determining whether inflation proves persistent enough to require a more restrictive policy response than is currently priced in.”

He believes the Federal Reserve is likely to keep rates unchanged for the remainder of 2026, despite market pricing that implies some probability of additional tightening. However, he cautions that the path is still uncertain.

“If the Fed does decide further tightening is required, it would probably involve multiple hikes, rather than a single symbolic move, to send a signal to markets.

“But our base case is that they do very little for the remainder of the year.”

Souders says attractive valuations, higher real bond yields and increased potential for monetary easing have boosted the appeal of international markets.

“We continue to see value in international (ex US) and emerging market fixed income. Beyond return potential, these markets now offer genuine diversification benefits not available to portfolios that are heavily concentrated in US assets.”

While private credit continues to offer attractive opportunities, investors should remain selective, Souders says.

“Not all private credit is created equal. The market has attracted significant capital over a relatively short period, much of it during an era of exceptionally low interest rates and optimistic growth assumptions.”

He remains concerned about quality and concentration risks within segments of the private credit market, particularly given the prevalence of lower-rated borrowers and significant exposure to technology and software sectors.

“When liquidity becomes constrained, investor anxiety can increase quickly. We believe there will likely be some challenging outcomes in parts of the market.”

Despite ongoing economic uncertainties, Souders believes the current yield environment presents one of the strongest opportunities for fixed income investors in years.

“Starting yield is one of the best indicators of future returns, and today’s yields are attractive across several segments of the market,” he says.

He nominates BB-rated US high-yield bonds, infrastructure, power, utilities, energy and commercial real estate debt as sectors he is bullish on.

Looking ahead, Souders believes investors should prepare for greater dispersion across markets and sectors rather than broad-based directional moves.

“There are reasons to be optimistic and reasons to be cautious. What matters now is identifying the areas where investors are being adequately compensated for risk.

“In this environment, active management is likely to be the key driver of outcomes, rather than relying on broad market exposure.”

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Stephen Miller

I’m not sure that the news flow of the last week or so has managed to advance whatever one may have been thinking about the decision of the Reserve Bank of Australia (RBA) Monetary Policy Board (MPB) at its next meeting in August.

The minutes from the June meeting noted that policy was ‘somewhat’ restrictive but at the same time exhibited some handwringing around elevated inflation expectations. What might have been at the forefront of the RBA Board’s contemplations was the Fair Work Commission (FWC) decision to award a 4.75 per cent increase in the minimum wage and awards. That such an increase occurred against a backdrop of ongoing abject productivity growth and how it might inform wider wage negotiations is clearly a concern going forward.

The May monthly consumer price index report (CPI) was not as bad as feared and is probably consistent with the most recently issued RBA forecasts back in May.

Nevertheless, Australian inflation remains elevated. Trimmed-mean consumer price index (CPI) inflation in Australia is currently running at 3.6 per cent. That puts Australia at the top the developed country inflation league. That is not a (developed) World Cup we should want to win!

Some more positive news since the June meeting has been declining oil prices which might mitigate the dangers of oil price inflation broadening into something even more pernicious.

But Australia’s inflation problem is way more than just oil prices, as illustrated by the aforementioned adverse comparison of Australian inflation with elsewhere in the developed world.

Jim Chalmers might have us believe that the Middle-East tensions and the attendant ratcheting up of the price of oil is the primary driver of our current inflation challenge, and yes there is a skerrick of truth in that, at least in absolute terms.

But the stark reality is Australia has a structural homegrown inflation proclivity.

That homegrown structural inflation proclivity reflects, inter alia, the interplay of regulatory creep in labour and goods markets that impose costs on businesses, part of which are passed on to consumers. The regulatory regime is also reflected in the abject productivity growth which makes the task of inflation containment all the harder.

As I’ve stated in the past, this state of affairs is not just down to the current Federal Government. Rather it reflects a long-standing policy deficiency since the end of the Hawke-Keating and Howard-Costello eras. Governments (both State and Federal and Labor and Coalition) have long averted their eyes from addressing productivity enhancing policy measures. Just as importantly, little attention has been given to avoiding productivity diminishing measures attaching to (mostly well-intentioned but poorly thought out) regulatory oversight of labour and goods markets.

Sure, (to paraphrase the Prime Minister) people don’t sit around the kitchen table talking about low (or negative) productivity growth. But productivity remains central to enhancing standards of living not the least through mitigating inflation.

The decision to “pause and reflect” at the June meeting was understandable given concerns about looming cyclical fragility. In that context it reflected a view that there was some utility in using the “space” provided by preceding policy rate increases to assess how the economy was adjusting and the impact of disruptions.

However, both the RBA minutes and Governor Bullock’s comments would indicate that the policy rate might still need to be increased at a later date. That reflects, inter alia, governments’ inability to support the RBA’s inflation battle with supportive structural policies.

So, in determining the course of the policy rate over coming months, the RBA faces considerable challenges having to negotiate a tricky (dare I say “narrow”) path between structural inflation factors and cyclical fragility.

The June CPI release later this month looms as a key staging post in how the negotiation of that path may evolve.

Eurozone June “flash” CPI: ECB to stand pat in July

Overnight, Euro area CPI inflation for June came in a little lower than expected at 2.8 per cent at the headline level (compared with 3 per cent expected). The core reading was also better than expected at 2.4 per cent (2.6 per cent expected).

While inflation remains above the ECB target of 2 per cent, there now seems almost no prospect of a policy rate (deposit facility) increase from the current 2.25 per cent at the July 22-23^rd meeting.

Speaking at the ECB’s Sintra Conference earlier in the week, ECB President Lagarde stated that she thought the ECB had gone some way to making the Eurozone economy less vulnerable to inflation shocks, perhaps reflecting a more rigorous financial framework.  She also noted that tensions in the Middle East had subsided (even if resolution was ‘far from assured’). Overnight at that same conference, Lagarde stated that she thought the risks to inflation and growth are ‘broadly balanced’ which would indicate that she sees no compelling case for a policy rate rise. (She also expressed a scepticism regarding the utility of “forward guidance” and other features of COVID era monetary policy such as “quantitative easing”.)

Other ECB decisionmakers are less sanguine.

Markets see the prospect of a hike in as closer to 30 per cent in September.

The latest set of ECB forecasts were based on Brent oil prices of around $US82 per barrel. It is currently at circa $US73 per barrel giving the ECB some “space” to digest whether further inflation pressures might necessitate a further increase.

Coming up: US non-farm payrolls tonight (ahead of Independence Day holiday)

As mentioned above, even more benign looking measures of inflation such as the Dallas Fed ‘s trimmed mean core PCE measure is, at was 2.4 per cent in May, still a way above the 2 per cent Fed “inflation” target.

And progress on the inflation front has been excruciatingly slow.

So absent some sharp and unforeseen deterioration in the labour market a policy rate cut hardly looks proximate.

Tonight sees the release of the June non-farm payrolls report ahead of Friday’s Independence Day holiday.

Indications are that the labour market remains in satisfactory condition.

The May Job Openings and Labor Turnover survey (JOLTs) report saw openings mostly unchanged at a healthy enough 7.6m.

The ADP June payrolls report showed a solid enough gain of 98k (even if lower than the 113k increase expected). The ADP report is sometimes dismissed (too easily in my view) because of its poor record in foreshadowing month-to-month movements in the Bureau of Labor Statistics payrolls measure. However, it is just as good a measure of the state of the labour market as the payrolls report.

The June Institute of Supply Management (ISM) manufacturing index (PMI) released overnight paints a reasonably satisfactory picture of the US manufacturing sector: the index coming in unchanged at 53.3. The employment component increased to to 49.7 from 48.6 in May (50.0 is the neutral point between expansion and contraction). The prices component declined to 73.0 from 82.1 in May. That is still elevated but maybe a harbinger of some easing of price pressures to come.  

A consensus outcome for payrolls of a circa 110k increase in employment and an unemployment rate unchanged at 4.3 per cent with average earnings growth of 3.5 per cent is not going to move the dial for any Fed members.

By Stephen Miller, investment strategist

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Decarbonisation is reshaping the global economy, creating long-term investment opportunities across clean energy, energy efficiency, circular economy infrastructure and climate-driven innovation.

Few themes rival the scale, urgency and long-term significance of climate change. Consequently, regions, countries, companies and individuals are taking positive action to decarbonise the planet and work toward net zero 2050 goals. For growth equity investors, decarbonisation is not simply a regulatory obligation or a moral imperative. It is the single largest, earnings-driven wealth-creation opportunity of our generation.

Decarbonisation has crossed the threshold from future ambition to today’s dominant economic reality, propelled by an unprecedented alignment of policy, corporate capital and investor mandate. With over 90 percent of global GDP now bound to net-zero targets, the regulatory floor has permanently shifted.

Corporate giants like Microsoft, Walmart and Samsung are no longer just making promises, they are deploying hundreds of billions of dollars to re-engineer supply chains, lock down clean energy grids and build climate-resilient operations. For investors, this isn’t a passive ESG checkbox; it is a directive to deploy capital into the businesses driving this structural transformation.

Yet, transitioning the global economy is a monumental task. Hitting terminal climate targets requires an enormous, sustained capital expenditure cycle across every major sector. While early market attention focused heavily on renewable energy and electric vehicles, the next phase of growth is far more diverse. The most compelling, earnings-driven opportunities now span critical, high-barrier sectors including advanced nuclear energy, energy efficiency and circular economy infrastructure.

Climate and the S-curve

Climate is not a cyclical trend; it is a permanent structural rewrite of the global economy that will span decades. Achieving net-zero emissions by mid-century will require estimated capital in excess of US$50 trillion. For growth investors, the critical question is no longer whether this capital allocation will happen, but rather, which companies will capture the lion’s share.

To reinforce the opportunity available to investors, one only needs to look at climate’s S-curve.

The S-curve models how an investment theme, such as climate, moves from niche concept to dominant market standard. Rather than a straight line, the S-curve breaks down into three distinct structural components, each representing a critical phase in that thematic’s lifecycle.

• Incubation phase – at the bottom of the curve, pioneering technologies often face high initial capital costs, regulatory bottlenecks and steep engineering hurdles.
• Inflection and acceleration – once a technology hits commercial viability it crosses a critical threshold. Costs drop, demand surges and growth enters a hyper-accelerated phase. The most resilient compounders in a global growth portfolio capitalise on this multi-year runway, scaling their total addressable market and generating durable earnings growth.
• Saturation – eventually, the curve flattens. The market matures, competition intensifies and incremental gains become harder to secure.

As illustrated in figure one, climate and related decarbonisation technologies are right at the start of the S-Curve. This means a long runway of growth, significant earnings growth potential and ultimately, positive contribution to investor portfolios.

Driving forces of the climate transition

This massive macroeconomic shift is sustained by an interlocking trio of structural drivers (figure two):

• Geopolitical policy and mandates – subsidies, tax incentives and regulatory penalties are setting a permanent economic floor for green tech adoption.
• Corporate capex reallocation – market leaders are proactively deploying hundreds of billions to future-proof their supply chains and operational resilience.
• Investor capital mandates – institutional asset allocation is permanently shifting, starving carbon-heavy legacy businesses of capital while rewarding green compounders.

Crucially, these three forces do not operate in isolation. They form a self-reinforcing feedback loop that creates a multi-decade compounding tailwind for the high-growth companies anchoring the transition. Let’s examine each of these tailwinds in greater detail.

Geopolitical policy – the foundation for action

Over the past decade, climate policies have evolved from aspirational targets to enforceable regulations, reshaping entire industries. The Paris Agreement set the global benchmark for emissions reduction, while COP28 reinforced the ambition with commitments to triple renewable energy capacity by 2030 and nuclear energy by 2050.

National policies are now following suit. The Inflation Reduction Act in the United States – despite some rollbacks from President Trump in the ‘One Big Beautiful Bill’ in July 2025 – and the European Union’s Green Deal are directing hundreds of billions of dollars in public support and mobilising trillions in total investment toward clean energy, electrification and industrial decarbonisation.

While the political landscape varies by region, the trend is clear – governments are using regulation, financial incentives and carbon pricing to steer capital toward low-emissions technologies. Countries representing more than 90 percent of global GDP have now adopted net-zero targets, up from roughly 16 percent in 2019^[1].

The scale of these policy-driven investment flows is accelerating the adoption of renewables, grid infrastructure, energy storage and efficiency technologies, thereby reinforcing the case for long-term structural growth.

Corporate leadership and capex reallocation

While government policy is providing the framework for the energy transition, corporate capital is increasingly driving its implementation. Some of the world’s largest companies are investing directly in renewable and low-carbon energy sources, including nuclear power, while securing long-term power purchase agreements (PPAs) to guarantee access to reliable, carbon-free electricity.

These investments are motivated by more than sustainability objectives. The rapid growth of AI, data centres and electrification are creating unprecedented demand for power, making energy security and affordability strategic priorities for businesses. At the same time, commercial property owners and industrial operators are investing in energy-efficient infrastructure. This ranges from HVAC systems, insulation and building upgrades, to lower operating costs and reduce emissions.

Together, these trends reflect a fundamental shift in corporate climate strategy. Rather than relying primarily on carbon offsets, businesses are embedding decarbonisation into their operations, supply chains and physical assets. This is creating growing demand for the technologies and infrastructure needed to support a lower-carbon economy, from energy storage and grid modernisation to advanced efficiency solutions.

Investor influence – capital allocation as a force for change

The financial sector is playing a critical role in accelerating the climate transition. Global investment in the energy transition reached a record US$2.3 trillion in 2025, up 8 percent from the previous year, with capital flowing into renewable energy, electrified transport, power grids, energy storage and other decarbonisation technologies^[2]. This demonstrates a compelling investment opportunity.

ESG strategies have shifted from passive screening to active capital deployment. Instead of just picking companies that already boast low emissions, forward-thinking investors are targeting the enablers of true decarbonisation – those scaling clean power, advancing the circular economy and maximising energy efficiency.

Concurrently, shareholder pressure is intensifying. Businesses face mounting demands to lock in emissions targets, boost transparency and clean up their supply chains. In short: climate risk is now a core financial risk, and laggards are losing their competitive edge.

Climate investing does not always mean avoiding high-emissions companies altogether. Some of the most critical investment opportunities lie in companies with significant carbon footprints that are leading their industries in decarbonisation – whether by transitioning to clean energy, adopting breakthrough efficiency technologies or setting ambitious emissions reduction targets. These businesses may not be low carbon today but their role in transforming industrial processes, power generation, and heavy transport is essential to reaching net zero.

Opportunities within climate: four key sub-themes

Within its climate fund, Munro Partners focuses on four key sub-themes: clean energy, energy efficiency, the circular economy and clean transport.

Clean energy – the foundation of decarbonisation

Clean energy is essential to reaching net zero. However, not all clean energy investments are created equal. Renewables like solar and wind are now well established, but they face increasing commoditisation, intense competition and supply chain risks. For example, Chinese dominance in solar panel manufacturing has driven prices lower and squeezed profit margins, making these investments less attractive. Meanwhile, the dependence of renewables on weather conditions means they cannot meet rising energy demand alone. Regardless of this, solar and onshore wind are on the trajectory to be the more cost competitive energy technologies globally^[3].

Nuclear energy, on the other hand, is seeing a resurgence as a reliable, carbon-free baseload power source. Hyper scalers, including Microsoft and Amazon, are actively securing long-term nuclear power contracts to meet their sustainability commitments and ensure a stable energy supply for their AI-driven data centres. While small modular reactors (SMRs) hold promise, their commercial deployment is still in the early stages and likely won’t scale until the 2030s.

While power generation is vital, a highly compelling investment opportunity exists in energy enablers. These companies provide the grid upgrades, energy storage and critical infrastructure required to seamlessly integrate renewable and nuclear power into the broader energy ecosystem.

Stock story: CATL (China)

Contemporary Amperex Technology Co. Limited (CATL) is the world’s largest battery manufacturer. holding a 39.2 percent global market share in electric vehicle (EV) batteries and 30.4 percent in grid-scale Energy Storage Systems (ESS) according to 2025 data from SNE Research. To sustain growth, the company is diversifying away from pure automotive dependency into higher-margin utility-scale storage, driven by surging AI data centre energy demands, alongside electric shipping and aviation.

Energy efficiency – the unsung hero of decarbonisation

Despite being an overlooked climate asset, energy efficiency outperformed renewables in reducing US emissions over the past decade. By eliminating demand at the source rather than just decarbonising supply, efficiency solutions deliver a dual advantage: immediate cost savings and structural emissions reductions.

Buildings alone account for nearly 40 percent of global energy use, making HVAC systems, insulation and energy management software critical areas of investment. With short payback periods – often under two years – energy efficiency solutions represent one of the fastest-growing and most financially attractive areas of climate investment.

Industrial energy efficiency is becoming a major investment theme. Technologies such as industrial process optimisation, heat pumps and waste heat recovery are improving operational efficiency in manufacturing, logistics and data centres.

Circular economy – reducing waste, increasing sustainability

The transition to a sustainable economy is also about redefining how we use materials. The circular economy focuses on waste reduction, increased recycling and the creation of more sustainable production systems.

Plastics, industrial waste and water scarcity present some of the biggest environmental challenges today. Companies involved in waste management, advanced recycling and water treatment solutions are seeing rising demand, particularly as corporate and government policies push for higher sustainability standards in packaging and industrial processes.

Beyond traditional waste management, innovation in alternative materials – such as bio-based plastics, low carbon cement and synthetic fuels – is opening new investment opportunities. These industries are still in the early stages, but they are set to grow as global supply chains adapt to increasing regulatory and consumer pressure.

Stock story: Clean Harbours (United States)

Clean Harbors is North America’s largest environmental services provider and a primary executor of the industrial circular economy. Through its Safety-Kleen subsidiary, the company operates a closed-loop infrastructure network that processes hundreds of millions of gallons of hazardous waste and used motor oil annually. Clean Harbors collects roughly one out of every five gallons of waste oil in North America, re-refining it into high-quality base oils and lubricants that require up to 85% less energy to produce than crude oil alternatives. The company’s recycling volumes reached 1.9 million metric tons in 2024, clearing its 2030 target years ahead of schedule^[4].

For investors, this asset-heavy infrastructure creates a significant competitive moat; the company leverages recurring service revenues from a diverse corporate customer base to drive compounding free cash flow, capitalising directly on rising corporate ESG mandates and supply chain reshoring trends.

Clean transport – beyond the EV

The rise of electric vehicles (EVs) is one of the most visible shifts in the climate transition, but the investment case for direct EV exposure is becoming more complex. A combination of oversupply, slowing demand and aggressive competition from China has put pressure on automakers, making investments less compelling in the short term.

However, the broader clean transport ecosystem remains an attractive investment theme. The supply chain behind EVs – including battery materials, charging infrastructure and grid integration technologies – continues to grow as electrification expands across passenger vehicles, trucks and public transport.

At the same time, low-carbon fuels, hydrogen, and sustainable aviation solutions are emerging as potential areas for future investment, particularly in industries where electrification is not yet viable.

Looking ahead: emerging drivers and innovations

Decarbonisation is accelerating, shifting climate investing beyond its first generation. Investors must look past standard renewables and efficiency to capture emerging opportunities driven by changing energy grid dynamics, new technology deployment, and shifting corporate sustainability mandates.

The rapid adoption of artificial intelligence is reshaping global energy consumption. AI workloads are significantly more power-intensive than traditional computing, and as businesses deploy AI at scale, data centre electricity demand is set to surge.

According to the International Energy Agency (IEA), total global electricity consumption from data centres is projected to roughly double by 2030, climbing from 485 terawatt-hours (TWh) to 950 TWh, accounting for approximately 3 percent of global electricity demand. Notably, power consumption from data centres specifically focused on AI is poised to triple, reaching 465 TWh by 2030 to nearly match the energy footprint of conventional data centres^[5].

AI is also playing a role in energy efficiency and grid optimisation. Machine learning models are being used to improve electricity demand forecasting, enhance battery storage performance and increase the efficiency of industrial and building energy systems. While AI is accelerating the need for clean power, it is also emerging as a key enabler of smarter energy use.

At the same time, heavy industry is undergoing a structural shift. New industrial technologies are emerging – from green steel and cement to low-carbon chemical production – driven by both regulation and corporate commitments to reduce supply chain emissions. While these areas are still in the early stages, they may represent the next major investment wave in the climate transition.

The transition to net zero will fluctuate rather than progress in a straight line, dictated by changing political landscapes, technological breakthroughs and shifting consumer behaviour. Yet the macro trajectory remains undeniable. Capital allocation from both public and private sectors is steadily flowing into decarbonisation, targeted directly at upgrading energy infrastructure, scaling efficiency tech and modernising resource management.

For forward-looking investors, the climate transition has transcended ethical necessity to become a structural economic theme defining the 21st century. This systemic shift is already reshaping global industries and is unlocking substantial value across energy, transport agriculture and finance. Driven by tightening regulatory mandates, shifting consumer preferences and institutional capital favouring sustainable assets, the financial momentum behind decarbonisation will continue to compound.

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References:
[1] https://zerotracker.net/
[2] BloombergNEF, Energy Transition Investment Trends 2025
[3] Wood Mackenzie, Global competitiveness of renewable LCOE continues to accelerate
[4] https://resource-recycling.com/plastics/2025/09/24/clean-harbors-hits-2030-recycling-goal-early/
[5] Key Questions on Energy and AI, International Energy Agency, April 2026

The information included in this article is provided for informational purposes only and is general advice only. It does not take into account an investor’s own objectives. The information contained in this article reflects, as of the date of publication, the current opinion of Munro Partners and is subject to change without notice. Sources for the material contained in this article are deemed reliable but cannot be guaranteed. We do not represent that this information is accurate and complete, and it should not be relied upon as such. Any opinions expressed in this material reflect our judgment at this date, are subject to change and should not be relied upon as the basis of your investment decisions. All reasonable care has been taken in producing the information set out in this article however subsequent changes in circumstances may occur at any time and may impact on the accuracy of the information. Neither Munro Partners, GSFM Pty Ltd, their related bodies nor associates gives any warranty nor makes any representation nor accepts responsibility for the accuracy or completeness of the information contained in this article.

The post CPD: Capitalising on global growth in the decarbonisation era appeared first on AdviserVoice.

Damien McIntyre

Structural changes in global capital markets have reshaped the investment landscape, and investors are increasingly viewing private markets as a core portfolio allocation, according to GSFM CEO, Damien McIntyre.

But as private markets continue to mature, manager selection and portfolio construction will become even more important, McIntyre says.

“Private markets are no longer a niche allocation reserved for large institutions. More companies are choosing to stay private for longer, meaning investors relying solely on listed markets are accessing a smaller proportion of the global opportunity set.”

McIntyre says private markets now encompass a broad range of asset classes, including private equity, private credit, infrastructure, real estate and venture capital, providing investors with additional sources of diversification and return.

“By investing across all private markets, it is possible to build more resilient portfolios by accessing investments that are driven by different fundamentals to listed markets.”

McIntyre says it is not surprising that investor interest in private markets had accelerated in recent years.

“The market volatility experienced during 2022 reminded investors that traditional diversification doesn’t always work as expected,” he says.

“Public companies often operate under an intense 90-day reporting cycle,” he explains.

“Private market investments tend to be valued on underlying business fundamentals rather than daily market sentiment, reducing the impact of short-term noise and allowing managers to focus on long-term value creation.

“Private ownership allows businesses to focus on improving operations, investing for growth and creating value over several years rather than managing for the next quarterly result.

“The advantage is that management teams have ability to execute long-term strategies without the pressure of meeting quarterly earnings expectations that comes with listed markets.”

But McIntyre says manager selection is an important element of successful private market investing.

“The dispersion between top-performing and average managers in private markets is significantly wider than in listed markets, making manager selection a key driver of long-term returns.”

Rather than concentrating exposure in a single private asset class, McIntyre said the CI Global Private Markets Funds take an approach that combines private equity, private credit, infrastructure, real estate and venture capital within a diversified portfolio framework.

“The approach is to diversify across managers, asset classes, investment vintages and liquidity profiles,” he says.

“This provides investors with exposure to the breadth of opportunities available across private markets while helping manage portfolio risk.”

This is not to say that listed markets do not have a place.

“The role of private markets isn’t to replace listed investments but to complement them, improving diversification and potentially increasing long-term risk-adjusted returns.”

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Daniel Waller

As the pool of insurer partners shrinks, a more deliberate approach to panel construction, one that prioritises resilience alongside product fit, is becoming critical to protecting client outcomes and business stability.

Think of your insurer panel like an investment portfolio. A client who puts everything into a single stock might be fine, until they’re not. The same logic applies to how advisers structure their insurer relationships. And with consolidation accelerating across Australia’s life insurance market, that logic has never mattered more.

Insurers are merging, acquiring and restructuring in pursuit of scale and efficiency. MLC Life Insurance and Resolution Life Australasia merged late last year to form Acenda^[1], creating one of Australia’s largest life insurers. Zurich announced a $415 million acquisition of ClearView^[2], expected to complete later this year. And AIA absorbed the Integrity Life portfolio^[3] – a business that had already exited new advice clients – completing that transfer in early 2025. Three significant moves in the space of 18 months.

None of this is inherently problematic. Bigger players can mean stronger capital bases, broader product ranges and more invested distribution infrastructure. But for advisers, fewer players means something else entirely: concentration risk is becoming one of the most underappreciated business risks in the industry.

When fewer insurers account for a greater share of adviser business, the impact of any change, whether it’s repricing, underwriting adjustments, service disruptions or strategic shifts, becomes amplified across client portfolios. In a more concentrated market, the question is no longer just which insurer you choose. It’s how exposed your clients are to that insurer’s decisions when conditions change.

Concentration risk isn’t just a business risk – it’s a client risk

Over-reliance on a single insurer can quickly become a client experience issue at scale. This becomes particularly important during periods of merger integration or structural change. Even when the long-term rationale for a merger is sound, systems need to be combined, teams restructured and service models reset^[4]. During that period, advisers may see delays in underwriting decisions, inconsistent service experiences or longer claims processing times.

These issues rarely stay operational. A delayed underwriting outcome can feel like uncertainty. A slower claims process can feel like a lack of support at the very moment clients need it most. A sudden pricing change can raise questions about whether the original recommendation still holds. Over time, those experiences affect trust, retention and the perceived value of advice.

The challenge compounds when a large proportion of clients sit with the same provider. A repricing decision, a change to the service proposition, or a shift in underwriting appetite can trigger a wave of client reviews and conversations simultaneously. What might otherwise be a manageable insurer adjustment becomes a business-wide event, affecting large segments of the client base at once and increasing the operational burden on advisers.

The issue isn’t insurer quality. Even the strongest insurers experience periods of change. The issue is concentration, and how exposed your clients are to any one provider’s decisions over time. An adviser who has placed the majority of their book with a single insurer doesn’t just face a service issue when that insurer hits turbulence. They face a client trust issue, a relationship management issue and an operational issue, often simultaneously and at scale.

What matters when assessing insurer partnerships today

Adviser panels have traditionally been built around client fit, product competitiveness and operational efficiency. In a consolidating market, those criteria aren’t sufficient on their own. The question to add is a forward-looking one: how will this insurer behave over the next three to five years, and how will my clients experience that?

That means looking beyond the usual product analysis to factors such as:

• Consistency of underwriting philosophy over time, not just current appetite but how stable it has been through previous periods of ownership change or market pressure.
• Claims reputation, particularly during disruption. Claims performance in a steady state tells you something. During an integration period, it tells you much more.
• Service capacity and responsiveness during change. How has this insurer managed continuity through previous system transitions? The answer is usually visible if you ask peers who lived through it.
• Clarity of long-term strategic intent in the advised channel. Is advice central to this insurer’s growth strategy, or a distribution priority that could be deprioritised when capital allocation decisions are made?

Ownership structure is one of the most underused lenses in panel assessment. An insurer that answers to shareholders operates under different incentives to one that answers to policyholders, and those differences show up in decisions around repricing, service investment and long-term product design. Understanding those dynamics, whether the insurer is listed, privately owned or member-owned, gives advisers a more complete picture of how a partner is likely to behave when conditions change.

A three-step lens for reviewing insurer relationships

1. Look beneath the surface. Go beyond product and pricing to assess factors such as financial stability, ownership structure and long-term strategic intent. Consider how these elements shape decision-making over time, particularly in areas such as pricing, service investment and underwriting philosophy, and how aligned those decisions are with member or customer outcomes.
2. Consider how change may play out. Think through how events such as mergers, acquisitions or shifts in capital priorities could affect service, underwriting and client outcomes. Focus on how those changes are likely to be experienced in practice, not just how they are communicated.
3. Sense-check against real-world experience. Draw on peer insights to understand how insurers are performing through periods of change. Pay close attention to consistency across service, underwriting and claims, particularly when conditions are less stable.

Diversification enables better client outcomes, not just risk mitigation

Diversification is often treated as a defensive move – a hedge against things going wrong. But that framing undersells it.

A well-constructed panel improves the quality of advice itself, giving advisers the flexibility to match clients more precisely to the provider best suited to their needs and risk profile, adapt as insurer settings change, and avoid forced compromises when one provider shifts position.

Different insurers bring different strengths. Larger players offer scale, capital depth and product breadth. Specialist providers bring flexibility, niche expertise and responsiveness. And member focused insurers can introduce a longer-term perspective, less influenced by shareholder return dynamics and more oriented toward pricing stability and reinvestment in service^[5]. A thoughtful mix of capabilities, models and incentives, rather than simply more providers, is what creates genuine resilience.

Panels can’t be static in a market that isn’t

Consolidation will continue. So will the integration periods, product resets and strategic pivots that follow. That’s not a reason for alarm, it’s a reason for intentionality.

The advisers who stand out aren’t necessarily those with the largest panels or the most provider relationships. They’re the ones who have thought carefully about what their panel is actually exposed to, and why, who stay curious about how the market is shifting, ask harder questions of their insurer partners, and treat panel construction as a living part of their practice.

A diversified investment portfolio doesn’t just protect against loss. It creates the conditions for better outcomes. A well-constructed insurer panel works the same way.

By Daniel Waller, Head of Distribution

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Notes:
[1] https://www.insurancebusinessmag.com/au/news/life-insurance/acenda-group-formed-after-resolution-life-global-acquisition-closes-555138.aspx
[2] https://finance.yahoo.com/news/zurich-australia-acquire-clearview-wealth-113928138.html
[3] https://www.insurancewatch.com.au/life-insurance-companies.html
[4] https://www.insurancebusinessmag.com/us/news/mergers-acquisitions/bigger-isnt-better-why-scaledriven-insurance-manda-is-falling-out-of-favor-571998.aspx
[5] https://www.insuranceandestates.com/mutual-insurance-company-vs-stock-insurance-company/

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Deanne Stewart

Aware Super welcomes the start of the Payday Super regime on Wednesday 1 July, one of the most meaningful improvements to Australia’s retirement savings system in a generation.

From Wednesday, employers are required to pay superannuation at the same time as salary and wages, with contributions required to reach an employee’s super fund within seven business days of each payday in most cases. The reform ends a long-standing arrangement under which super could be paid quarterly.

Aware Super CEO Deanne Stewart said: “This is a genuine win for Australian workers. Super is as important to people’s financial wellbeing as the wages in their pocket and should be treated that way. Payday Super fixes an outdated system and Australian workers will ultimately be better off for it.

“This change will help ensure workers receive the right amount of super and can track their payments more easily. It also means contributions will be invested sooner, building retirement savings faster.”

Ms Stewart said the reform would have an especially significant impact on women, many of whom have historically lost super through the gaps created by quarterly payment cycles. “Many of Aware Super’s members are women working in health care, education and community services — often in part-time or casual roles. Payday Super addresses a structural inequity that has cost these workers real money over their working lives. That matters enormously to us,” she said.

The fund has worked closely with employers in the lead-up to 1 July, providing guidance and practical support to help them understand and meet their obligations.

Ms Stewart said Aware Super would continue to support employers in the early stages of implementation. “We know that for many employers, especially those who are not large payroll operators, this is a significant change. We’ve been working closely with employer groups in the lead up to 1 July and we’ll continue to support them as the new system beds in. Our goal is to help make this transition as straightforward as possible.”

The fund’s readiness for Payday Super has been underpinned by its Catalyst Project, completed in 2023, which brought member administration in-house and digitised over 90 per cent of Aware Super’s processes — creating a modern, efficient administration platform purpose-built for a more dynamic contribution environment.

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