The chief investment officer of Australia's largest super fund says the pandemic has accelerated a shift to digital that will overhaul the standing of the ASX's biggest players
The chief investment officer of the country's largest super fund says the composition of the ASX will fundamentally shift away from old world industries such as resources and financials as the coronavirus pandemic accelerates the shift to digital.
"If you have a look, [biotech company] CSL is probably the biggest stock in Australia right now, you go back 10 years ago, that wouldn’t have been [in] the top 10 stocks."The market is already heavily penalising old economy, climate laggard businesses in the way they price them," Mr Delaney said. "As the world shifts to a more digital online model, the composition of the Australian equity market will change.
"I’m not a huge fan of Australian equities but I wouldn’t want to be getting too bearish at this point in the cycle," Mr Delaney said. Mr Delaney said the property sector had been hit by falling rental yields but also the growing preference for online shopping. "That's a structural change that's likely to continue," he said, adding the fund would prioritise property in the logistics industries rather than retail.
"Super funds are used to printing hugely strong returns," he said. "Average funds are delivering CPI plus 5, 6, 7, 8 [per cent]. It’s been a great period for investors."The next decade would be "far more challenging", Mr Lamborn said, as companies are revalued and black swan events, from deepening recessions to climate change events, become more regular.
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