Chris Briant

The $9 billion industry superannuation fund Australian Catholic Superannuation & Retirement Fund (ACSRF) has joined forces with the global specialist implementation manager Parametric Portfolio Associates LLC (‘Parametric’) to offer members in its award-winning RetireSmart option a new custom-designed equities strategy with a focus on capital retention and income.

In a new mandate, Parametric will manage the equity portfolio as part of ACSRF’s RetireSmart pension solution, which was launched in 2015 around the concept of separate ‘cash’ and ‘growth’ asset buckets for retirees.

Parametric, who manages existing equity portfolios for ACSRF, collaborated with the fund to co-design the new approach to equity investing in retirement.

The equities strategy breaks new ground in the superannuation industry, which has traditionally designed equities strategies for ‘accumulation-phase’ members still working and saving for their retirement.  With a specific focus on the very different needs of ACSRF’s retired members, Parametric’s goal will be to ensure RetireSmart equities offer downside protection in falling markets and meet specific yield targets above market benchmarks to provide members with a reliable income stream.

Greg Cantor, CEO of ACSRF, believes the new approach shows some of the fund’s best attributes:  “We didn’t want to wait for the Government to impose its ‘CIPR’ retirement product timeline on us or the rest of the industry to really move on this.  We have nearly one-third of our members in retirement, and many more making plans to retire in the very near future. This particular cohort of members have needs that, we felt, required a customised solution. We have established a reputation for innovation across the fund and we are building on this further by rethinking the investment challenge for retired members.”

Chris Briant, Head of Eaton Vance Australia, Parametric’s Australia-based affiliate, says: “ACSRF has rightly recognised the need for a more thoughtful approach to equity investing for retired members, with the COVID-19 pandemic providing a stark reminder of this investment reality.”

Briant also applauded the fund for focusing on its members’ needs and prioritising the issue: “It’s to ACSRF’s credit it has moved ahead of the industry curve by establishing the RetireSmart pension solution and continuing to enhance it.”

A hallmark of the new equities approach has been the extensive research collaboration between ACSRF and Parametric over the past year to workshop different ideas. Key to this particular portfolio will be its ability to generate consistent income for its members whilst ensuring that capital balances are protected from market drawdowns.

Briant says: “We are proud of our investment partnership with ACSRF and are thrilled to have helped them apply our specific equity factor investing, defensive equity and tax management capabilities to a custom member-focused retirement solution.”

For ACSRF’s Cantor, the commitment to partnership is empowering: “We seek investment partners with collaborative cultures and a willingness to customise – these are really powerful tools for us in continuing to lead the way in the retirement solution design space.  Ultimately, it’s easy to ‘talk the talk’ about being focused on members, but actually delivering thoughtful new solutions like this to members – especially in these challenging investment times – shows that we really are living this principle and putting members first.”

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