Skip to content
Subscriber Only

It’s Going to Get Harder for Australian Pension Funds to Make Money

  • Investors envisage more money flowing away from bonds, stocks
  • Returns are going to be below recent years, pension funds say
Pension World Reels From 'Financial Vandalism' of Falling Yields

Photographer: Krisztian Bocsi/Bloomberg

Australia’s pension funds will be forced to push more money into less traditional assets -- such as apartment developments and even direct lending to companies -- after the strong recent performance of equities and fixed-income left valuations lofty in public markets.

That’s the assessment of investors managing money directly for, or on behalf of, the country’s A$2.9 trillion ($2 trillion) pension pool, who gathered in Hobart this week. With four out of five retirement savers in funds that have a target return of more than 3% above inflation and a government heaping pressure on under performing funds, that’s a tough ask, said Ross Etherington.