Australia’s Pension Fund Sector Has Leap Frogged Canada

Australia’s $1.3 trillion pension fund sector has leap-frogged Canada to take fourth spot within the Towers Watson International Pension Asset Examine 2011. In line with the research, the worth of Australian pension fund property elevated to 103 per cent of gross home product (GDP) on the finish of 2010, in comparison with 93 per cent in 2009. “Australia’s steady rise is basically attributable to our sturdy financial system, our buoyant fairness markets and our ongoing contribution progress each by means of the Superannuation Assure launched in 1992 and the “Higher Tremendous” tax adjustments in 2007,” Towers Watson Australia investor companies director Graeme Miller stated.

“It was additionally helped by the strengthening of the Australian greenback throughout this era,” he stated. Globally, institutional pension fund property have grown by 66 per cent since 2000, from $15.8 trillion to $25.7 trillion.

America stays the biggest pension market on this planet at $15.1 trillion, whereas Japan got here in second at $3.5 trillion. In third place is the UK with $2.26 trillion in property.

A breakdown of asset allocations confirmed that Australian tremendous funds, with 49 per cent, have a better allocation to equities than most international locations.

Australia additionally has the second highest allocation to various property, at 25 per cent of complete property, of the 13 largest pension markets on this planet. Solely Switzerland has a better allocation in various property with 29 per cent.

“Whereas Australian funds’ asset allocation in equities stays excessive, we proceed to see funds lowering their fairness allocations in favour of different property equivalent to infrastructure and property,” Miller stated.

“We predict this development to proceed as sturdy contribution flows pour into Australian funds.”

Pension fund steadiness sheets continued to strengthen throughout 2010. Pension property now quantity to 76 per cent of worldwide GDP, up from 61 per cent in 2008.

“The worldwide monetary disaster remains to be with us and the continuing aftershocks are a continuous reminder that the nascent financial restoration remains to be very tenuous,” Towers Watson world head of funding Carl Hess stated.

“Whereas nervousness in regards to the volatility of worldwide markets and excessive occasions is slightly below the floor, there’s broad acceptance that that is the brand new regular and that buyers will want funding methods which can be extra versatile and adaptable than they’ve been up to now,” Hess stated.

“Whereas the restoration of the markets is to be welcomed, it mustn’t distract from the foremost points confronting the business and the weaknesses within the system which governments and firms should withstand,” he stated.

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