Top Australian Pension Funds Rush to Hedge Against Aussie Surge

Australia’s biggest pension funds have had to revisit their currency playbook as a sustained rally in the local dollar threatens to erode portfolio returns in the A$4.5 trillion ($3.2 trillion) retirement industry.

CBUS Super, a A$110 billion pension fund, has reduced its foreign currency exposure, according to Chief Investment Officer Leigh Gavin. Bigger rival Australian Retirement Trust — the nation’s second largest with A$370 billion in assets — has lowered its exposure to the US dollar and is diversifying toward the euro, yen and pound.