There was a time when the main thing Australia sent overseas was the products from our many mines and farms.
It's still the case that we are sending plenty of iron ore, beef, and wheat overseas; but, perhaps surprisingly, we are now sending plenty of investment dollars overseas as well.
Some recent research by NAB has found that Australia’s bulging superannuation sector now has more than half of its assets invested overseas.
The Super Insights that surveyed 37 big Australian superannuation funds that represent more than 80% of the industry's assets under management found that the search for good risk adjusted returns and diversification meant that investing outside Australia was increasingly popular.
Other factors that are driving the offshore investment push are the large amounts of liquidity in large markets and the digital transformation such as AI that is concentrated in US and some other global markets.
The rise to beyond half international exposure has been quite rapid as well, jumping from 47.8% in 2023 to 50.9% in 2025.
Money Still Flowing to Technology
There has been no shortage of pundits calling the exploding values for technology and AI companies a bubble but it has so far been an excellent place to be and most super funds have stuck to their knitting and retained their index weighting on the technology sector despite valuation concerns.
What the big super funds have been conscious of is the foreign exchange challenges involved in investing offshore, with more and longer hedging employed to guard against currency movements.
Another preference has been for unlisted assets, especially international unlisted infrastructure, which are being used to build portfolio resilience.
Funds are also targeting higher overall foreign exchange exposures than in 2023 while hedging the same proportion of their international equity exposures back into the Australian dollar.
Global Resilience Part of the Equation
HESTA chief executive Debby Blakey told the recent ASFA Conference that the super fund has been considering global resilience as a key thematic when making responsible investment decisions.
"We see this as a systemic risk, the same as climate change, the same as decent work would be systemic risks right across the portfolio, we think global resilience is the same," Blakey said.
"If we look back over the last five years, what we've had to navigate as investors in terms of, first of all, a global pandemic, huge disruption to supply chains, geopolitical tensions and all that that has meant different sea routes, the introduction of different tariffs.’’
Blakey said super funds must consider global political issues, and the impact they may have not only on returns, but also how world leaders may influence the transition to net zero.
Low Carbon and Critical Metals Vital
"I would love to think geopolitical tensions will disappear miraculously, but I'm not sure they will. But more importantly, we are all going to be focused on that transition to a low carbon future," she said.
"At the same time, the demand on critical minerals, the demand on stable and sustainable supply chain, and then, of course, dealing globally with disruptions of tech. We feel the whole area of responsible investment is going to shift, and this area of global resilience will be critical.’’
Blakey said Australian superannuation funds can be a "beacon" in making responsible investments that can hold the path amid geopolitical tensions.
