Is now an ideal time to top up your superannuation?

By Grace Ormsby

May 27 2020
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For those who are in a stable economic position, it’s an “absolutely brilliant time to be putting money into super”, according to an asset manager.

Speaking about the current economic climate, the chief investment officer and founder of 4D Infrastructure, Sarah Shaw, highlighted that for those people out there who are in a position to be adding to their superannuation, “the opportunity set at the moment is humongous”.

With markets where they are, Ms Shaw said there is an ability for those who do not need to access that retirement money for 10, 15 or 20 years to capitalise on the outlook.

While acknowledging that there are people out there that “absolutely need to” access their superannuation early, and that it’s a really difficult outcome of this environment, Ms Shaw iterated that she’s “an advocate for — if you can, put it in”.

“Clearly, that’s not the case for everybody,” she said.

The CIO’s comments come after Industry Super Australia’s recent announcement that it would be earmarking $28 billion of funds for investment into Australian businesses, equities, property and infrastructure “in a bid to support the economy, drive growth and enable job creation”.

As an infrastructure investor herself, Ms Shaw said her current task is to reposition portfolios for “the new economic world” — or in other words, the “other side” of the COVID-19 crisis.

She said: “From our view, it definitely has turned and the question I have is: What happens in September?

“I think that’s when we’ll really see the economic hit.

“I really see at the moment that the markets are quite buoyant or more buoyant than what I think the economic outlook suggests they should be.”

That’s because everyone is focused on the potential of opening up economies, getting back on track, getting on top of COVID-19 and the talk of a vaccine, according to Ms Shaw.

While that’s all really positive, the CIO said she doesn’t believe we’ve dealt with the economic fallout of what this closure has meant.

Pointing to jobless numbers in the United States being the highest they have been since the depression, coinciding with a rally in the markets, she added that “that doesn’t really make sense”.

And while “2020 hasn’t shaped up to be the year that we anticipated”, Ms Shaw observed that “infrastructure is not supposed to be exciting, but in this environment, it’s not a bad place to be!”

“Thankfully, we are in an asset class where we can really actively shift between what we would say are macro-accessory stocks like your toll roads, your airports or your rail companies to more economic-resilient stocks, which are utilities,” she said.

“And don’t get me wrong, I’m not selling out of airports or toll roads — there will still be that bounce once we see economies open up.

“But in the long-term economic outlook that we’re facing, I do believe an increased allocation to the earnings resilience in utilities would be a positive place to be.”

About the author

Grace Ormsby

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

About the author

Grace Ormsby

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

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