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Top investors in Australia’s largest retirement pension fund The US says it will continue to control new investments in a vote of trust from one of the world’s largest economy, despite the market turmoil caused by tariffs.
Mark Delaney, chief investment officer at Australiansuper, which manages $367 billion ($223 billion) of assets, said the tariff announcement is a “significant volatility event,” but the US appears to be the most attractive investment area in the long run. More than half of the superannuation fund’s international exposure is in the US, and Delaney said it has not reduced this in recent weeks.
“There’s a huge amount of US having a strong economic performance (although it’s back a bit), strong productivity growth, strong profit growth, and in any case, many of the best companies in the world have become an attractive place to store capital,” he told the Financial Times in an interview.
“It’s very difficult to predict how the event will unfold. It’s much better to focus on medium-term drivers and long-term drivers,” he said, adding that “more than half of our international trends will continue to move towards the US – the rest will be shared across the world.”
Delaney’s comments come as US President Donald Trump’s tariffs have wreaked havoc in the global market, raising questions about whether large international investors from overseas will continue to own such large quantities of US assets.
The S&P 500 blue chip stock index fell by more than 11% in the days after Wednesday’s tariff announcement. The longtime US Treasury Department has also been declining recently as investors demanded higher returns to own more volatile debt.
Australia’s Retirement Pension Fund, one of the world’s largest and fastest growing retirement savings pools, has been expanding rapidly in the international market in recent years, with nearly USD 800 million invested outside of Australia, according to a survey by Infrastructure Giant IFM.
The report, published in February, estimates Australia’s pension fund investment in the United States will more than double from US$400 million to more than $1 to $1 over the next decade, of which $240 billion could reach the private market.
AustralianSuper plans to allocate roughly 70% of its influx to international markets, and plans to increase its private equity exposure from 5% to 8% over the next five years, primarily from its New York offices.
Some large investors are paying attention to US holdings. David Colosimo, fixed income director at Unisuper, said on a podcast on Friday that his fund has a huge exposure to US assets and is “questioning its commitment” in the future.
“Frankly, I think we saw a peak investment in US assets,” he said. Trump added that it was “terrifying for business.”
However, Delaney, an Australian CIO since its inception in 2006, said “there is a major change in the way the global trading regime is changing.”
He said: “Look at the main holdings of investors. There aren’t that many products. It’s mainly a service, and that’s how the global economy has evolved.”
