Ian Patrick

Australian Retirement Trust doubles up on double-digit investment returns in High Growth option Australian Retirement Trust (ART), one of Australia’s largest super funds, has delivered an 11.3% return for its ART High Growth option for the 2023/24 financial year.

It’s the second year in a row ART has delivered double digit returns for the option, cementing its place as the highest performing investment option in the SuperRatings SR50 Growth Index, ranking number 1 over the last 10 years as at 31 May 2024.

ART Chief Investment Officer, Ian Patrick said the fund is exceptionally proud to deliver another year of strong results for its members.

“Strong global and local equities have been the primary driver for our performance this year. We’ve seen robust and consistent outperformance across the board.

“After decades of low interest rates and a challenging outlook for long-term super returns, we now face an environment where the outlook is more constructive for delivering on real return targets for members. Of course nothing is certain, but there is some comfort to take from this.”

Mr Patrick said as a profit-for-members fund, ART’s investment team strives to deliver superior risk adjusted outcomes for its 2.3 million members, so they can retire well with confidence.

“Super is the longest-term investment many of us are going to have. Our investment team takes this responsibility seriously and aims to set the fund up for success,” he said.

“In more good news for members, we launch our streamlined suite of choice investment options from 1 July. This will give them freedom to awaken their super by choosing from 15 carefully constructed choice investment options that cover a broad range of objectives and investment timeframes to meet their goals and life stages.

“For members under the age of 50 who don’t make a choice, we will invest them into a MySuper investment strategy that is equivalent to the ART High Growth option. This will mean over 1.4 million ART members will be transitioned into what has been our strongest performing strategy over the past 10 years.

“We believe in the power of financial advice and encourage Australians to seek advice before making changes to their investment decisions. For Australian Retirement Trust members, they can access advice as part of their membership.”

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Ian Patrick

Australian Retirement Trust (ART), one of Australia’s largest superannuation (pension) funds, has opened its first overseas office in London as it seeks to further capitalise on international investment opportunities.

With over 40% of assets outside of Australia and more than A$25b dollars invested in the UK and Europe, the expansion aligns with the A$280b Fund’s strategy to further build out a leading global investment capability.

ART Chief Investment Officer, Ian Patrick, said it was an exciting time for the Fund and demonstrates the scale of investments now being undertaken since the Fund’s merger more than two years ago.

“Australian Retirement Trust partners with world-class external managers and this is the next logical step for us to expand our investment capability,” said Mr Patrick.

“The team in Australian Retirement Trust’s UK office will work with external investment managers to source new investment opportunities for our more than 2.3 million members.

“Having an office in close proximity to our external investment managers will help us secure even more compelling investment opportunities for our members.”

ART’s Head of Global Real Assets, Michael Weaver said the ART team had already met with the RT Hon Lord David Cameron, Secretary of State for Foreign, Commonwealth and Development Affairs on his visit to Australia last month to discuss local investment opportunities. “As a profit-for-members fund, delivering strong long-term performance for our members is critical for Australian Retirement Trust. We look forward to capitalising on suitable infrastructure and real estate investments in the UK and Europe that our members will benefit from into retirement,” Mr Weaver said.

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Jody Fitzgerald

Australian Retirement Trust (ART), one of Australia’s largest superannuation funds, has announced the appointment of Jody Fitzgerald as Head of Investment Resilience and Planning.

The recently created role is accountable for ensuring investment portfolios and investment capability can consistently and effectively navigate and adapt to diverse investment landscapes resulting in optimal returns across market cycles.

ART’s Chief Investment Officer, Ian Patrick said the appointment was an integral step to set the team up for continued success in guarding and growing the retirement savings of our members.

“Australian Retirement Trust invests more than $260 billion on behalf of our more than 2.3 million members, which is a responsibility we take very seriously,” Mr Patrick said.

“Jody brings to Australian Retirement Trust a wealth of capability and experience in investment management and business leadership roles, and we look forward to her contribution to deliver on our vision to be Australia’s most chosen and trusted retirement partner. “

Jody joins ART from Morningstar Investment Management, where she was Head of Institutional Portfolio Management and Solutions and will commence at ART in late January 2024.

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Nicole Bradford

Australian Retirement Trust (ART), one of Australia’s largest superannuation funds, has taken a further step in its commitment to a Net Zero greenhouse gas emissions investment portfolio by 2050 with the launch of its Net Zero 2050 Roadmap (Roadmap).

The release of the Fund’s Roadmap follows the commitment to a net zero greenhouse gas emissions investment portfolio by 2050, which was adopted shortly after the Fund’s merger in 2022.

ART’s Head of Sustainable Investments, Nicole Bradford, said that the Roadmap outlines how ART currently plans to transition its investment portfolio and accelerate actions towards a net zero greenhouse gas emissions investment portfolio by 2050.

“As one of Australia’s largest superannuation funds, Australian Retirement Trust’s Net Zero 2050 Roadmap takes a long-term view that aims to be pragmatic, measured and actionable, to help manage climate risk while safe-guarding and growing the retirement savings of our members to help them retire well, with confidence,” Ms Bradford said.

“Our Roadmap is led by guiding principles which recognise, most importantly, Australian Retirement Trust’s legal duty to our members.

“A key principle of our Roadmap is that we cannot achieve a net zero greenhouse gas emissions investment portfolio by 2050 alone. We take seriously our role as an investor and have outlined activities which aim to support our emissions reduction targets by engaging with key stakeholders and encouraging investee companies to achieve real-world emission reductions towards a low carbon economy.

“Achieving a Net Zero greenhouse gas emissions investment portfolio by 2050 is going to take a combination of emissions reductions and capital for investments that support decarbonisation. Australian Retirement Trust has set a number of targets across a range of activities that will help guide us to our Net Zero 2050 goal,” said Ms Bradford.

ART’s Chief Investment Officer, Ian Patrick, said the Fund’s Roadmap put members at its centre in what it aims to achieve.

“At Australian Retirement Trust, our vision is to be Australia’s most chosen and trusted retirement partner. We aim to be a top-performing fund that delivers and advocates for what matters most to our more than 2.3 million members, as well as our people and the communities in which we operate,” Mr Patrick said.

“The risks posed by climate change are some of the most significant of our time. Our members put their trust in ART to look after their retirement outcomes, and our Net Zero 2050 Roadmap aims to ensure that we have the guardrails to help us deliver on this commitment through our investments.

“ART takes our responsibilities as a leading global investor and to our members seriously, and we’re proud to launch our Roadmap. Our roadmap acknowledges our part in the transition towards a net zero economy, and we believe the industry’s ongoing collaborative approach to help address this challenge is preferable to trying to address this individually.

“Harnessing capital as a collective, with a unified voice, may add to the pace and help achieve the sizeable shift required to solve some of the challenges we as investors – and our society more broadly – are facing,” said Mr Patrick.

Key elements of the roadmap include:

• A target of a Net Zero greenhouse gas emission investment portfolio by 2050, aligned with the Paris Agreement goal of limiting global warming to well below 2°C. ART’s net zero target refers to the Scope 3 category 15 (investments) emissions^[1].
• Interim targets of 43% reduction in emissions intensity by 2030 (against the FY21 baseline) (covering listed equities, infrastructure and real estate asset classes) in relation to scope 3 category 15 (investments) emissions.
• A target of engaging with 100% of ‘priority companies’ within our listed equities portfolio by 2030 (‘priority companies’ are those investee companies that together contribute 70% of financed emissions). This target proposes to include formal objectives, timeframes and escalation measures for direct engagements. As at 30 June 2022, ART engaged with 74% of its priority companies in the listed equities portfolio either directly, through collaborative initiatives or through service providers.
• A target of portfolio alignment with 50% of our ‘priority companies’ to be ‘net zero’ or ‘aligned’ to a net zero pathway within listed equities by 2030.
• In future, proposed adoption of a target for investments in climate-related opportunities.

———

[1] Scope 3 category 15 (investments) emissions. PCAF (2022). The Global GHG Accounting and Reporting Standard Part A: Financed Emissions. Second Edition.

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As part of the changes, there will be a newly created Chief of Retirement role to focus on the execution of ART’s retirement strategy and provide strategic leadership and guidance in the provision of all elements of the retirement offer, including product, investments, service model and advice.

Commenting on the changes, Chief Executive Officer Bernard Reilly said: “As we approach our one-year anniversary as Australian Retirement Trust, the time was right to consider our executive structure, ensuring we’re best placed to manage our expected growth and deliver on our commitment to our 2.2 million members.

“We believe our operating model will ensure we are providing market leading support for our members up to and through retirement. This is an important step as we strive to empower our members to retire well with confidence.

“Our vision is to be Australia’s most chosen and trusted retirement partner, and we believe this structure will align our business to deliver on this and set us up for continued success into the future.”

The executive team:

• Chief Executive Officer: Bernard Reilly
• Chief Commercial Officer: Dave Woodall
• Chief Financial Officer: Anthony Rose
• Chief Investment Officer: Ian Patrick
• Chief People Officer: Helen Jackson
• Chief Risk Officer: Anne Browne
• Chief Strategy Officer: Stevhan Davidson
• Chief Technology Officer: Rod Greenaway
• Chief Member Officer: vacant
• Chief Retirement Officer: vacant

Teifi Whatley, Chief Strategy Officer, will retire at the end of March after more than 20 years at Australian Retirement Trust and previously Sunsuper in roles spanning brand, marketing, technology and strategy.

Karin Muller, Chief Member Officer, has decided to pursue opportunities outside of the fund and will stay on with ART until the end of March. Karin joined QSuper in 2015 and has held roles across information technology, transformation and member services.

Teifi and Karin played a significant role in delivering our merger and our first year as ART. Their hard work, commitment and unwavering dedication to our members will leave a lasting legacy.” said Mr Reilly.

The new structure is effective from 1 March and recruitment for the two vacant roles of Chief of Retirement and Chief Member Officer is underway.

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Leading research house SuperRatings has released the top performing funds within its SR50 Balanced Index which tracks performance of 50 options with exposure to growth assets of between 60 to 76%. Hostplus – Balanced was the top performing option for the 1-year period ending 30 June 2022, returning 1.6%.

David Elia Chief Executive Officer for Hostplus indicated the fund’s performance was “…a testament to Hostplus’s active investment approach, especially in navigating volatile markets.”

QANTAS Super’s balanced option came in second achieving a return of 0.6%, following its first-place result for the financial year to 30 June 2021.

QANTAS Super’s Chief Investment Officer Andrew Spence commented, “Our focus on diversification, risk management and investment governance help to deliver competitive returns despite the uncertainty in markets, as evidenced by our returns in FY 21/22 and FY 20/21.”

The table above also displays 10-year performance for these funds that have performed the best over the 1-year period, as super is ultimately a long-term investment and while it is interesting to compare performance over shorter-term periods, it is not the full story. This is particularly important to emphasise given the unprecedented levels of volatility we have seen since the beginning of the pandemic.

Hostplus was also the top performer over the long-term, with an average annual return of 9.7% over the last decade. Followed closely by AustralianSuper – Balanced with a return of 9.3% and Australian Retirement Trust – Super Savings with a return of 9.00%. Cbus – Growth (MySuper) delivered a close fourth ranking return of 8.96%.

AustralianSuper Chief Investment Officer Mark Delaney stated, “After more than 10 years of economic growth our outlook suggests a possible shift from economic expansion to slowdown in the coming years. In response, we have started to readjust to a more defensive strategy, as conditions become less supportive of growth asset classes such as shares.”

The Bumpiness Factor 

SuperRatings has for many years also looked at how bumpy or consistent a fund’s returns are over time. We have continued to focus on this amid the ongoing ups and downs we are seeing across Australian and global investment markets.

Kirby Rappell Executive Director of SuperRatings commented, “Since the bottom of the GFC we haven’t seen huge amounts of volatility coming through, there have been a few moments, but we have seen extreme levels of volatility since COVID-19 hit and in terms of the menu for the year ahead, we expect to see more volatility.”

The table below shows the top 10 funds ranked according to their volatility-adjusted return, which measures how much members are being rewarded for taking on the ups and downs.

Australian Retirement Trust – QSuper Accum. – Balanced sits at the top of the table below, which shows that the fund achieved a return of 6.1% p.a. over the past seven years. Catholic Super – Balanced Growth (MySuper) follows closely in terms of the ranking based on the ability to navigate the ups and downs of the market. While Mercy Super – MySuper Balanced a small-sized fund ranks third, punching above its weight and achieved a 7-year return of 6.8%.

Australian Retirement Trust’s Chief Investment Officer Ian Patrick commented, “Both Australian Retirement Trust portfolios incorporate dynamic asset allocation processes that see weights increased as expected forward returns increase. While the recent sell off in many markets clearly makes them cheaper, this is tempered by economic views, particularly given the uncertain outlook for inflation.”

Kirby Rappell commented, “While the 2022 financial year has seen super funds record a modest fall, the benefits of diversification have shone through. When we compare returns for equity, bond and listed property markets to balanced style portfolios among super funds, these results should be reassuring to members.”

Mr Rappell continued, “Superannuation is a long-term investment and patience remains key. For those Australians under 50, the recent market volatility is not expected to have any impact on their retirement. This year’s results are just one out of a 30 to 40 year investment for younger Australians.”

This result is more concerning for those nearing or in retirement, however, we often see these members sitting in investment options which are less exposed to these market movements which can lessen the impact. The sobering result for this year is likely to be those members invested in diversified fixed interest, with rising bond yields resulting in capital losses for members in an area often considered defensive.

As 30 June returns are now being finalised, funds will be focused on preparing member statements. Making sure you are putting aside some time to engage with your super statement will be time well spent. Checking the type of investment option you are in, and whether it suits the level of ups and downs you’re comfortable with, is worthwhile, with most funds offering a risk profiling tool on their websites to help members understand their own attitudes to risk. As well as seeing the calculators your fund offers, about 60% of super funds now offer an app, so if you have never checked your super before, now might be the time to get started.

Super has a lot to celebrate over the past 30 years. Since 1992, an estimated 7% per annum return means that $1 invested in 1992 is now estimated to be worth $7.67, depending on fees. While we will see ups and downs over time, super has performed strongly over the long term with 25 positive returns over the past 30 years.

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Ian Patrick

“Australian Retirement Trust has instructed its investment managers earlier this week to sell any remaining debt and equity investments and not to make any new investments in either Russia, Ukraine, or Belarus, which has now entered the conflict alongside Russia. In doing so, investment managers have been instructed to ensure adherence to all legal requirements imposed by Australian law and other relevant sanctions regimes.

In some cases, this may prove challenging, given that some key markets remain closed or difficult to access.

We cannot rule out having some minimal exposure despite the best endeavours of our managers; nor can we rule out the likelihood that some of the companies Australian Retirement Trust invests in may have some exposure to assets in the affected countries. However, we certainly expect those companies to manage their businesses in accordance with all relevant sanctions and applicable laws.

Even so, the portfolios’ exposures were very limited prior to the onset of the crisis. For example, Russian shares accounted for less than 0.2 per cent of the Australian Retirement Trust Super Savings account assets. Our debt exposure was even smaller, at less than 0.1 per cent. Our Ukrainian exposure was minimal – a very small debt exposure of circa $6 million, which was less than 0.1 per cent of total assets.

In Australian Retirement Trust’s QSuper account assets there was no exposure to shares or bonds in either Russia or Ukraine and very limited exposure to the surrounding region, and that remains the case.”

By Ian Patrick, Chief Investment Officer  

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Yolanda Beattie

Australia’s investment management sector remains one of the most male dominated professions in the country – but changing dynamics are finally seeding change for women seeking a career as professional investors, according to a new paper released by female talent incubator Future IM/Pact.

According to the paper “Where are all the Women? How the Australian investment management industry is grappling with its lack of gender diversity and ideas to accelerate progress”, consolidation amongst Australian super funds and the trend for funds to manage assets internally is proving key to breaking down traditional structural barriers which has seen Australia lagging badly on the global diversity stage.

While this is positive news – Future IM/Pact founder Yolanda Beattie said critical structural barriers remained across the sector as fund managers struggled to both attract and retain women investors.

The white paper outlines a range of barriers preventing women entering and excelling in one of Australia’s largest and fastest-growing sectors. These barriers start at university where women are less likely to know about investment management as a career option; a perceived lack of confidence and passion in competing for roles; lack of mentors and sponsorship during early careers; and critical structural barriers due to fund managers having small front-office investment teams with low turnover and junior analysts requiring 2-3 years relevant experience.

Future IM/Pact founder, Yolanda Beattie said large super funds were able to offer a larger range and number of front-office investing roles across bigger investment teams, creating more junior roles and clearer career pathways that are key to attracting and developing junior female talent.

Super funds and asset managers support structural change

One of Australia’s largest superannuation funds, Sunsuper, managing more than $94 billion, has joined Future IM/Pact to help tackle diversity challenges faced by front-office investment teams.

In partnership with Future IM/Pact, Sunsuper aims to reduce the barriers to entry or re-entry for women wanting a future in investment management.

As a partner, Sunsuper plans to bolster its pipeline of female talent through mentorships and connections with women at university and related industries.

Sunsuper’s Chief Investment Officer, Ian Patrick, said: “We know that valuing and including diverse perspectives helps us make better investment decisions for our more than 1.4 million members, and attracting more women into the team is part of that endeavour. The collective effort of Future IM/Pact increases the visibility and reach we can have with young women who are exploring career options, making it easier for us to attract them to our Fund.”

Future IM/Pact launches early career program: Accelerate

Responding to growing demand from industry for help finding women with 2-5 years’ experience, Future IM/Pact is launching an early career program – Accelerate. Accelerate finds smart, numerate women working in traditional feeder roles and gives them exposure to industry leaders as well as development experiences that help them launch their front-office investing career.

Future IM/Pact also welcomes Munro Partners and Australian Ethical to its growing partner base.

“Too many funds believe they’re too small and their staff turnover is too low to have an impact on this issue. These are examples of funds who are determined to add to a collective effort that overcomes the issue of size,” Beattie said.

“Men are up to four times more likely than women to apply for junior analyst roles and when they do, they’re more likely to demonstrate the sought-after attributes of passion and conviction,” Beattie said.

“Because most funds only hire candidates with a minimum of 2-3 years’ experience, it’s not enough to just engage them at university. We need to be engaging women at scale in the traditional feeder roles of investment banking, management consulting, corporate finance and law, as well as at university,” she said.

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Ian Patrick

Sunsuper has awarded US based fund manager, Payden & Rygel, a $150 million mandate to manage a customised version of the Payden Absolute Return Investing (PARI) strategy.

Payden & Rygel is represented in the Australian market by Grant Samuel Funds Management (GSFM) and manages over $1.3bn in Absolute Return and Investment Grade Corporate portfolios on behalf of institutional and retail clients.

PARI is an actively managed global fixed income strategy that is unconstrained by traditional benchmarks. It aims to produce stable returns over time, regardless of how the overall market performs, and to provide a gross return of 2 – 3% per annum above the Bloomberg AusBond Bank Bill Index over time. By comparison, Sunsuper’s customised mandate will target an excess return (before fees) of 1.75%.

Sunsuper is one of Australia‘s largest and fastest growing super funds with $50 billion in funds under management and more than one million members. Chief Investment Officer, Ian Patrick, says this mandate will benefit members investing in the Fund’s Balanced, Retirement and Conservative options.

“This mandate is one of the many innovative ways we’re adding value to our members’ investment returns to meet their retirement savings needs,” Mr Patrick said.

“Sunsuper’s size and experienced investment team allows us to access specialised overseas investment strategies and tailor portfolios that generate an attractive risk/return profile, provide diversification and deliver greater value for money.”

The customised PARI strategy will be used as an additional alpha source alongside Sunsuper’s internally managed cash plus portfolio.

Charles Levinge, GSFM’s head of institutional business, says this is Payden & Rygel’s second absolute return fixed income mandate in the Australian market.

“Being awarded this mandate is not only a reflection of the continued interest we’re seeing in PARI but also Payden’s ability to work with clients to tailor and customise portfolios to meet their specific objectives,” Mr Levinge said.

The PARI approach has been developed and refined over more than nine years, and has over $7 billion in assets invested on behalf of clients globally.

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