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Australian super funds to boost currency hedging: survey

Peter Brieger
The country's biggest pension funds are warning that a jump in the Australian dollar could hurt their investment returns.
Australian super funds to boost currency hedging: survey
Key Points
  • Nearly 90% of Australia’s super funds plan to boost currency hedging to protect portfolios against volatility from Middle East tensions.
  • A 10% rise in the Australian dollar could reduce investment returns by an average of 8% for the majority of these pension funds.
  • A significant hedging gap exists across asset classes, with less than 30% of foreign private equity and hedge funds protected compared to over 75% for property and infrastructure.

Nearly 90% of Australia’s super funds plan to boost their currency hedging over the next few months across asset classes including private credit and private equity, a new survey says.

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