Why active investing is key to CareSuper’s outperformance

17 March 2022

Selecting the right investments to beat benchmark market returns and reduce risk are the key principles of active investing. CareSuper has consistently used active investment strategies to boost members' returns, resulting in a strong performance history spanning over 20 years.*

Active investing is what sets us apart

Our Chief Investment Officer, Suzanne Branton, notes the key to CareSuper’s track record of long-term outperformance is our active approach, which is central to our investment philosophy.

“CareSuper’s investment approach is focused on ensuring our members receive the best possible returns for their fees, by being active through the cycle and recognising that investment markets change,” she says.

“This means instead of investing passively, and replicating an index, our skilled investment managers are actively making decisions to buy or sell investments that they believe have the potential to outperform the broader market and maximise returns over the long term.” says Branton.

Our strategy allows us to ‘smooth out’ some of the highs and lows of share market uncertainty by ensuring our diversified options include a range of alternative assets, such as infrastructure, private equity and credit in addition to some of the more traditional asset classes like shares, property, bonds and cash. Furthermore, our size and agility means we can secure prime investments, as well as niche opportunities. Not every super fund can do this.

Combining active investing with downside protection

For CareSuper, Branton says active management is also about protecting our members’ savings from risk, especially in market downturns. She explains, “combining active investing with downside protection means we can provide members with strong long-term returns and resilience when markets dip or become volatile.”

Demonstrated by our strong performance record with this approach to investing, it is this strategy that has recently allowed us to respond to the current tensions between Ukraine and Russia.

Prior to the crisis unfolding in Ukraine, we held a small amount of Russian shares. CareSuper and our investment managers proactively exited Russian stock holdings, enabling us to largely complete this process before the Russian invasion of Ukraine.

As events unfolded, our proactive response has meant that the vast majority of our Russian exposure has already been sold and we are now left with a very minimal indirect residual holding in Russian stocks (i.e. less than 0.001% of our overall assets).

Despite this remaining residual holding, our aim to exit all Russian stocks has been successful. Because of our active approach, we were able to pivot and act quickly to move out of these investments prior to the introduction of global sanctions that blocked trading in these securities which left many other investors exposed to potential risk.

Looking ahead

Branton says while some funds might choose to take a passive investment approach, CareSuper will continue to actively look for the best investment opportunities in Australia and overseas for members. Our aim, she says, is to deliver a higher long-term ‘net benefit’ after fees, with consistent, sustainable returns and a ‘smoother ride’.

“We’ve had a lot of success with this approach, and we’re confident it will continue to deliver the right outcomes for our members over the long term,” says Branton.

To find out more about CareSuper’s investment approach and how we invest, head to the investment section on our website or watch our video on active investing.

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* SuperRatings Fund Crediting Rate survey SR50 Balanced (60-76) Index – January 2022. Past performance is not a reliable indicator of future performance and you should consider other factors before choosing a fund or changing your investments.