What we invest in
Why does AustralianSuper disclose its holdings?
We understand that your super savings matter to you – so we want to make it easy for you to see what you’re invested in.
We also believe it’s important to be transparent with members. That’s why we’ve been publishing what we invest in since 2016.
How often is this information updated?
It’s updated twice a year, as at 30 June and 31 December. We aim to provide the updates within 90 days of those dates.
Why don’t you provide a more recent list of investments?
When working out what information to provide, we factored in a number of things including:
- members’ information needs
- what can be provided in a timely manner
- how to ensure that returns weren’t negatively impacted by revealing market sensitive information.
The current timing means we can provide comprehensive investment information while minimising the chance of a negative impact on returns.
We think future legislation will require super funds to disclose holdings as at 30 June and 31 December. In addition, the process of publishing portfolio holdings partially relies on data provided by third parties that we can only obtain periodically.
Why do some investments show as zero percent?
An investment or exposure listed as 0.00% has a value that's less than 0.01% of the investment option.
Why do some investments show as zero dollars?
A zero dollar amount is typically due to the finalisation of a transaction where the investment has been sold but the final step of removing them from the list hasn’t occurred by the end of the period.
Why are ‘cash and derivatives’ listed within some asset classes?
We use derivatives, such as futures, to quickly and efficiently gain exposure to a particular asset or asset class – without physically owning it. . Derivatives help us efficiently target our desired position in asset classes such as bonds and shares. They benefit the portfolio by maintaining investment exposure in a cost effective way, and can also help to manage investment risk and enhance returns.
Cash can also be used to fund any switching in or out of investment options, especially the single asset class DIY Mix options. In share portfolios, cash can be held where funds are being invested in, or sold out of, share markets over time. This ensures we don’t put through large transactions in a short timeframe that could impact the market.
Why are there no specific values against property and infrastructure?
We’ve included a value range rather than a specific value for property and infrastructure. These aren't market listed assets and the values are market sensitive information. Detailing them may mean we don’t get as good a return as possible when we make investment decisions about them.
Why is there less information on private equity investments?
These investments are privately owned. They’re not market listed and the information and values are market sensitive. Revealing information on them publically may cause members’ returns to be negatively impacted.
In addition, some of our private equity managers haven't provided us with their permission to disclose details of the investments they make on our behalf. They aren't legally required to do so but we're continuing to work to increase the amount of information available.
Why are there negative values against some investments?
Negative values may appear next to some derivative exposures (such as options and currency and interest rate swaps) that are used for hedging and other purposes. You can find out more about how we use derivatives in our annual report.
Why are there some investments with no values?
In some instances the valuations aren't received in time to be included in this information. We're working on including more of them in future updates.
Some investments are in managed funds, that pool together investor’s money and buy a range of assets. Due to the complexity of these arrangements and, sometimes, confidentiality agreements in place, we're unable to provide this information publically. We're working with managers to increase the information we provide to members in future updates.
How can I see which investments I’m invested in personally?
The information is arranged by investment option. Choose the option/s you're invested in and browse the information. Currently it isn't possible to personalise the information to individual member accounts.
Why are there derivatives in share and fixed interest allocations? What are derivatives/futures?
Derivatives are used as an alternative way to gain exposure to certain assets or for hedging purposes among other reasons. Find out more in our annual report.
Why aren’t you showing the names of the investment managers next to their holdings?
The main focus of providing this information is so members can see what AustralianSuper invests in on their behalf rather than who's managing it. Additionally, in some cases, the same assets may be held by multiple managers and/or directly by AustralianSuper. This can make disclosure confusing. The current way we show information means members can see their total exposure to each investment.
You can view a list of fund managers we use at the Fund level in our annual report.
Where can I find out more information about a particular investment?
In the first instance, we recommend you do an internet search using the investment name. For example our Indexed Diversified and Member Direct options have investments managed by Vanguard and other product providers. You can find additional information about their index funds and exchange traded funds (ETFs) on their website.
You can always contact us if you’re looking for more information.
What proportion of the investments are hedged?
This depends on the asset class. Fixed interest, property, private equity and infrastructure assets, which are held offshore, are fully hedged. Both the international shares asset class and our International Shares investment option in the DIY Mix are unhedged.
For our PreMixed investment options, we set a target currency exposure each year as part of our strategic asset allocations process. This helps protect the options that have international assets from adverse currency movements.
Download our fact sheet for more on how we manage currency and our foreign currency targets.
How do you manage volatility in international markets?
We aim to reduce the impact of volatility of any one asset class or strategy by diversifying across and within asset classes.
We invest in direct property and infrastructure, like toll roads, ports and airports. These assets, perform differently to other assets like shares and may offer attractive returns during times of share market volatility.
AustralianSuper's dynamic asset allocation approach also provides flexibility to increase our exposure to defensive assets when necessary.
Our internal investment team manages how they allocate money to the different types of investments very carefully. They have the flexibility to make adjustments to account for volatility.
Read more about how we’re managing market volatility.
Why does Indexed Diversified only list the fund information?
The Indexed Diversified investment option gains its exposure to each asset class through index funds managed by Vanguard. Vanguard was chosen because of their expertise and value for managing these types of investments.
Why do you have so many small investments?
Diversification is necessary in investment portfolios to adequately control risk. We offer several PreMixed investment options, including the Balanced option, that are diversified across a range of asset classes, and sub-sectors and securities within asset classes.
Environmental, social and governance (ESG)
What’s AustralianSuper’s policy in relation to ESG?
Our purpose is to provide the best retirement outcomes for members. As such, we aim to provide superior long-term investment returns. As a long-term investor, we recognise the positive connection between better performance on environmental, social and governance (ESG) issues and better investment outcomes for members.
With members’ assets of over $142billion (as at 31 December 2018), we’re a significant investor in Australian and international markets. The ability to influence better ESG outcomes is an important part of being a large asset owner and delivering better long-term returns to members.
ESG considerations are an integral pillar of our investment approach and process. Effective board management and composition, executive remuneration, gender diversity, climate change, human rights and labour supply chain are all priority issues within our ESG and Stewardship Program.
Does the fund currently have any broad exclusions across its portfolios due to ESG considerations?
AustralianSuper integrates ESG considerations into our investment decision process across all investment options. That’s because we believe that investing in companies and assets with good ESG management provides better long-term returns for members as well as better outcomes for the broader economy and environment.
Across our broader portfolio, we don't implement screens, with the exception of tobacco. Tobacco is a unique investment, due to its particular characteristics and the damage it causes.
We understand that members have different ethical and social values so it’s important that we consider these preferences in our investment choices. We conduct research every two years with members to ensure we keep up to date with the issues most important to them. We apply exclusions to the Socially Aware option based on the top concerns members have identified. These screens are in addition to the ESG activities that are already part of our investment processes for all investment options. Download our Socially Aware fact sheet for more.
AustralianSuper also offers the Member Direct investment option when members can choose from a selection of shares, ETFs and term deposits.
Does AustralianSuper believe in divestment?
- Our view is that there are more appropriate actions to manage investment risks than simply divestment. Divestment is a last resort and we consider active management will provide better long-term outcomes for members and the broader economy and environment. We believe engaging with companies through our ESG and Stewardship Program is the most effective way to influence and improve ESG outcomes. We do this directly with companies or via our engagement partner, Australian Council of Superannuation Investors (ACSI). Activities include meeting with company chairs and/or senior management in person about governance and other ESG issues as well as actively exercising our shareholder voting rights. We also participate in broader industry networks and collaborate with other investors to influence ESG issues.
- Tobacco is the exception to our ESG framework given its particular characteristics.
- While we do not have a specific policy to divest from coal, the Fund is committed to reducing carbon emission in the portfolio to net zero by 2050.
- We do apply screens in the Socially Aware investment option covering a number of issues that members have identified as issues of concern. These screens are in addition to the ESG activities that are already part of our investment processes for all investment options. Download our Socially Aware fact sheet for more.
Why isn’t AustralianSuper getting rid of carbon and fossil fuels from its portfolio? How are you managing climate change risk?
- We recognise that climate change is a material investment issue and actively work to manage the investment risks and opportunities it creates. Climate change can have a broad ranging impact on economies, financial markets and members’ investments over the long term. As a large investor, our engagement activities in relation to climate change can influence improved company performance on the issue.
- We support the goals of the Paris Agreement on climate change and a smooth and just transition to a low carbon economy. We actively engage with companies on the risks relating to future fossil fuel consumption and physical changes in climate. Rather than excluding particular investments on the basis of these factors, we weigh the risks and returns for each investment and determine the appropriate exposure. Carbon asset risk is one of the priority topics in our ESG and Stewardship Program.
- We perform a carbon exposure assessment of its portfolio every two years. The latest assessment completed in 2019 by Trucost, an independent carbon consultancy firm, found that our Australian and international shares portfolios were less carbon intense than their benchmarks. In 2018, AustralianSuper ranked 18 out of the 100 largest global pension funds in the 2018 with regards to managing climate change in our investment portfolio.
- We also engage with companies with material exposure to fossil fuel assets to ensure they understand carbon risk, have appropriate risk management strategies in place and are appropriately valuing those assets with regard to potential future carbon constraints. In addition, we engage with our fund managers to ensure they’re integrating ESG considerations.
- This engagement may be done as a large shareholder in our own right, or collaboratively through organisations such as the Australian Council of Superannuation Investors (ACSI).
- We participate in broader industry networks and forums to help improve the operation of the financial system with regard to climate change risk. Collaboration with other like-minded investors gives us greater influence on climate change issues while also providing the opportunity to exchange ideas and practical solutions.
In relation to ESG matters, how does the fund seek to engage and influence companies that it invests in?
We predominately seek to engage and influence companies through our ESG and Stewardship Program.
Direct engagement is important as it enables us to influence the make-up of company boards and encourage positive behaviour on issues that impact members. Our objective is to effectively communicate our long-term investment interests to companies so that we can improve returns for members.
Our engagement process encompasses three key areas:
- Ongoing relationship building: To ensure that companies hear the importance of ESG issues to AustralianSuper on an ongoing basis;
- Themes based engagement: To focus on specific ESG themes that our ESG and Stewardship Program has identified as a priority;
- Ad hoc specific issues engagement: To seek resolution of specific ESG concerns or to engage on a particular voting matter.
Another key activity is voting, which is a key right of a shareholder. As a large investor, voting presents a significant opportunity to influence improve governance and other aspects of ESG performance. We vote on all resolutions of ASX200 companies, additional companies held directly by us in our internal portfolio, companies that we’re a large shareholder in and major global companies. Our objective is to vote on items in a manner that will:
- Create and/or enhance company value and;
- Ensure the value is fairly distributed.
We publish our voting record on a quarterly basis.
How do you ensure you don’t invest in companies with bad human rights practices such as child labour?
Human rights and supply chain issues can impact the long-term value of a company, so we integrate them into our ESG and Stewardship Program.
We take a proactive approach to understanding the investments in our portfolio. Every quarter we receive a report on companies that have breached the UN Global Compact for a variety of reasons. If the companies have ‘red flags’ against them and they're in our portfolios, we engage with our fund managers on their reasons for investing in the companies.