Australia's superannuation system, known as Super, has reached an impressive AUD 42 trillion, making it one of the largest pension pools globally. This significant growth is reshaping not only the domestic investment landscape but also the dynamics of global liquidity and foreign exchange flows. The analytical report published in the material substantiates the following: the impact of such a large pension pool on international markets is profound and warrants close attention.
Superannuation Funds Shift to Offshore Investments
Recent findings from Deutsche Bank reveal that nearly half of Super's assets are now invested offshore, reflecting a strategic shift as funds diversify their portfolios beyond local equities. The growth of Super is attributed to robust investment returns and mandatory contributions, with the Superannuation Guarantee set to rise from 3% in 1992 to 12% by 2025.
Australia's Role in Global Investment
This evolution is establishing Australia as a key player in global investment, as Super funds increasingly convert local contributions into foreign assets. Consequently, their influence in foreign exchange swap and hedging markets is growing, which is exerting pressure on currency bases.
Deutsche Bank's Collaboration with Super Funds
In response to these developments, Deutsche Bank is strengthening its collaboration with Australia's pension ecosystem, working closely with Super funds to create customized strategies across a range of financial products. This partnership is vital as Australian pension money continues to flow into international markets.
While Australia's superannuation system continues to grow, Sui has recently faced a market price decline. For more details on Sui's performance and recent upgrades, see more.
