MAGAZINE OF CHOICE FOR AUSTRALIA’S WEALTH INDUSTRY
www.moneymanagement.com.au
Vol. 33 No 8 | June 6, 2019
ELECTION WRAP-UP
Hume inherits a portfolio of unfinished business
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INFOCUS
Breaking into the New Zealand asset market
INFRASTRUCTURE
CAPITAL GROWTH
How to build long-term wealth in a low-growth world
ASIC chooses industry fund default BY MIKE TAYLOR
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Building a strong foundation for investing INFRASTRUCTURE is the foundation of how cities and societies are built, so it shouldn’t be any surprise it’s a sector that generates attractive investment opportunities. We rely on infrastructure to get to places, either by car, train, plane or boat, and to receive energy, water and telecommunications. Gerald Stack, from Money Management's Fund Manager of the Year Infrastructure Securities award winner Magellan Infrastructure Securities, said the benefit of the sector is its reliable and predictable returns. “That’s the magic of infrastructure, the fact that earnings are reliable and dependable, no matter what the world throws at them,” Stack said. The benefit of those investments is not only a healthy return, but also contributing to the building of systems and assets that are the foundation of the growth of economies. It’s because of that investment, that other sectors are able to grow, develop and evolve, and despite the new technologies and sectors that are attractive to invest in, none of them exist without a strong infrastructure background to build-off. It’s a portfolio that offers strengths all through different business cycles, whether it’s steady regulated utilities that offer consistent returns, or user pay assets that strengthen as the overall economy does.
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THE AUSTRALIAN Securities and Investments Commission (ASIC) has chosen Australia’s largest industry superannuation fund, AustralianSuper as its default fund for ASIC employees. The regulator, which had been criticised by some elements of the financial services for the perception that it favoured industry funds, selected AustralianSuper as a default on the basis of its change of status as a Government entity. Those employed by ASIC were now employed under the ASIC Act instead of the Public Service Act.
The regulator said that as part of the transition process it had selected AustralianSuper as the new default superannuation fund for employees who joined from 1 July this year and who did not nominate a fund. It said there was no change to arrangements for existing employees, including those who are members of the Commonwealth Superannuation Scheme, the Public Sector Superannuation Scheme and the Public Sector Superannuation accumulation plan. ASIC said it would be reviewing its default fund arrangements every four years.
Accountants seek voice in retirement advice provision ACCOUNTANTS have sought a place at the table when the Government initiates a review of the retirement income system, suggesting an essential element is proving access to affordable financial advice. The Institute of Public Accountants (IPA) welcomed a recent announcement by the Treasurer, Josh Frydenberg, that he would be commissioning a review of the retirement income system which would be inclusive of the interfaces between superannuation, government pensions and taxation. Commenting on the move, IPA chief executive, Andrew Conway, said the review was long overdue in circumstances where there was no well-defined view on what a retirement living standard should look like. “There is also the budgetary considerations of funding the age pension and superannuation tax concessions and ensuring that the system is sustainable going forward,” he said. “The need to encourage greater investment in superannuation to facilitate self-funded retirement is critical as Australia will not be able to fund government pensions in the future, especially considering our ageing population,” Conway said. “Different mechanisms need to be considered given the longevity risk when Continued on page 3
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