Super funds cut exposures to banks

Not-for-profit superannuation funds have an average of 3% less exposure to bank stocks in their equities portfolios than last year, according to recent Rainmaker research.

These funds still have a large exposure to bank stocks, owning about $30 billion worth at an average 22% of their equities portfolios.

Together, not-for-profit and retail super funds own about 22% of Australia's banks, Rainmaker estimates.

"Australia's super funds owning one fifth of the banks means superannuation, banking and the housing sector, which constitutes 70% of bank loans, are intensely commingled. The potential for contagion risk is therefore high," the report said.

"But while Australian equities stock holdings are very concentrated, the significant fund by fund variation affirms these portfolios are actively managed, implying the potential for widespread adoption of indexing is limited."

Rainmaker analysed the portfolio disclosures of 26 not-for profit superannuation funds; no retail funds currently disclose their equity holdings.

In regards to holdings, the top international stocks held by NFP super funds are: Samsung, Alphabet, Facebook, Amazon, Tencent, Microsoft, Visa, Taiwan Semicon, Alibaba and Nestle.

"International tech stocks making up an average 11% of NFP international equities holdings implies these funds own about $30 billion of these stocks," the report said.

Read more: SuperRainmakerAlibabaAlphabetAmazonFacebookMicrosoftNestleSamsungTaiwan SemiconTencentVisa
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