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Switching prompts fund to alter allocations

Qantas Super has altered asset allocations across all its investment options in response to COVID-19, market volatility and a high number of members switching options.

The $8.5 billion corporate superannuation fund said that the changes would improve its ability to meet return objectives.

"Since the start of the COVID-19 health crisis, we have seen an increase in market volatility and a higher than usual number of members making requests to switch their investment options," the fund said in a Significant Event Notice to members.

"This has meant the balance of some of our asset classes have changed relative to others. Widening the asset allocation ranges will improve our ability to achieve investment return objectives, in the best interests of our members."

Qantas Super widened the range of asset allocations for each asset class in each option by up to 10%.

In its conservative option allocation to growth assets went from 20-40% to 15-45% while defensive assets went from 60-80% to 55-85%. Cash allocation in that option went from 5-25% to 0-30%.

In Qantas Super's aggressive and 'Glidepath: Take off' option growth asset allocation went from 80-100% to 75-100%. Previously that growth mix was be 60-80% equities and 10-30% growth alternatives, now it will be 5-35% growth alternatives and 55-85% equities.

"Without changes to our asset allocation ranges we might have to consider selling some of these investments at a time that doing so may not be in the best interests of our members," the fund said.

The changes do not affect the investment objectives for any options or the risk level or minimum suggested time for investment.

"We believe investment markets can deviate from their fair value from time to time and that it is possible to selectively identify and invest in assets that represent good value for members. This is especially the case when investment markets are processing crisis events," Qantas Super said.

"We may increase or decrease exposure to a particular asset class if we feel that doing so may help us meet investment return objectives and deliver on your retirement goals."

With many Qantas workers impacted by the travel bans imposed to slow the spread of COVID-19, Qantas Super has already paid out at least $33 million in early release applications, according to APRA's most recent data.

Read our full COVID-19 news coverage and analysis here.

Read more: Qantas SuperAPRA
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