Weekend Edition: Super investments and the Aussie dollar
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What is the focus of NAB’s Super Insights Survey and why does it matter?
Australia's growing super industry with a growing emphasis on overseas investment. What do we know about where the money is going and how it's being managed? Well, the latest Super Insights survey from NAB has a lot of the answers at a time of unusual international trade and currency uncertainty. So let's dig into it. The morning call from NAB with Phil Dobby.
The weekend
edition. So where do super funds put their money and how do they manage risk? And is that changing with President Trump's constantly evolving trade policies? And how do these funds manage liquidity, particularly for uh overseas assets, where there's that double risk of the the return on the asset and also the FX rate? Uh is that a risk or is that perhaps a double opportunity? Well, every two years NAB does a comprehensive report on the super. Annuation industry. Their twelfth report came out this month based on a survey of thirty-seven funds, accounting for more than eighty percent of the Australian superannuation sector. The report was written jointly by Ray Atrill and Rodrigo Catrill, their familiar names, both their morning call regulars and from NABS FX strategy team, and Mike Simons, who is Nabb's head of currency overlay solutions.
And all three of them are on the call this weekend to talk to the first. through the report's findings. So Mike, let's start with you. Tell me a little bit more about uh about the report, how w how the data was collected, what you know, what it's set out to do, uh but also tell me about your job. So c currency overlay solutions, what exactly is that? You know, if you get asked at a barbecue what you do, what do what's your answer?
And um thank you, Phil, for uh giving me the opportunity to to join my illustrious colleagues. Um very much appreciated. Um so currency overlay, yes. Uh we provide uh currency hedging services to a range of clients, including superannuation funds. And what that is, is a service where typically uh our client will outsource a lot of the operational risk for the currency hedging uh to NAB. And so that includes things such as you know calculation of the underlying currency exposures in the investment portfolio. And those investment portfolios can be listed, unlisted, you know, a range of different strategies. We monitor those exposures on an ongoing basis within predefined torrents bad That agreed with our client.
How does NAB’s Currency Overlay team help super funds manage FX risk?
We adjust the hedges to make sure that they're within those tolerance bands as required. And then the final piece that we cover is reporting, and that can be both internal reporting for their audit treasury teams, but also we support clients around some of their external reporting uh requirements for regulators as it relates to derivatives. So it's a full end to end service that we're providing, um centred around, you know, currency management where, you know, clients uh don't have uh necessarily the internal resources to do that all themselves.
And is that becoming more problematic this year with Donald Trump, you know, changing trade policies and we're we're seeing a b uh a great deal more fluctuation in currencies?
Well I think you know, w what we've seen is that more and more investors in Australia are allocating uh capital investing uh monies offshore in a range of different investment strategies. And by definition, if you think about investment risk with probably equity risk at the top of the table, currency exposure uh and currency risk is incre you know, if if if it was important before, it's becoming increasingly important. So, you know, we we are seeing a a trend if you like for what we call emerging institutional investors that uh are managing pools of of money. And, you know, traditionally those those funds have gone into a range of uh o Aussie domestic uh bonds cash uh equities and Now um y you know, i i it's become very clear that for diversification reasons and and and given attractive risk adjusted returns, investors are investing a lot more offshore.
survey is to show uh just how much is being invested domestically and overseas, the size of investment funds, how they how their investment uh approach differs, what sort of assets that they're investing in, all that sort of good stuff.
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Chapters
8 chapters
1
What is the focus of NAB’s Super Insights Survey and why does it matter?
0:01–2:29
2
How does NAB’s Currency Overlay team help super funds manage FX risk?
2:29–7:55
3
What did the survey reveal about the rise of overseas investments by Australian super funds?
7:55–13:07
4
Which regions and asset classes are attracting the most super‑fund capital abroad?
13:07–17:04
5
What are the top thematic drivers (AI, decarbonisation, infrastructure) shaping fund allocations?
17:04–22:25
6
How are super funds handling liquidity and hedging with growing FX exposure?
22:25–27:24
7
What impact does the expanding super‑fund overseas exposure have on the Australian dollar?
27:24–30:14
8
What are the key takeaways and what should listeners watch for in the next survey?
30:14–30:17