My experience is that the RBA's comments in this article are ill informed, and certainly wide of the mark.

All superannuation funds have significant offshore holdings of illiquid and fixed interest investments (Bonds, Infrastructure, Private Equity, Credit, etc.) all of which are 100% hedged back into AUD. So, while only a minority of listed overseas equities are hedged, a large proportion of overseas assets are hedged.

Further, all superannuation funds already have strong liquidity management programs in place which take into account hedging requirements.

The risk management processes in Australian Superannuation funds are far more sophisticated than the RBA seems to appreciate.

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