Superannuation

What is a Superannuation? Superannuation in Australia refers to the preparations people make to accumulate funds to provide them with income for retirement. Unfortunately, given current economic conditions, having your funds in a Superannuation is risky. To understand why, we need to briefly recapture the previous economic and political circumstances in Australia. 

 

In 2007, Kevin Rudd was the Prime Minister, succeeding John Howard. One of the first things he did, was dismantle the Howard economics. He recognized China’s aggressive economic growth and decided to allocate billions of dollars towards constructions of mines and extraction of your natural resources like coal and iron. This took your country into what is known as the Mining Boom. Unfortunately, today, the mining boom is over. During the Mining Boom, China was growing at 15 percent per annum. Today, their growth has not surpassed 7 percent. After Kevin Rudd, Tony Abbott took over as the new Prime Minister. In his short term, he opened trading agreements with Japan, South Korea and China. 

 

This left Australia’s economy reliable on foreign investments and revenue streams. Therefore, the past 4 years the central bank of Australia, RBA (Reserve Bank of Australia) has dropped interest rates. This caused a depreciation in the value of Australia’s currency.  Ever since, Australia has had difficulty adjusting to the economic hardships.

 

What does this have to do with your Superannuation being at risk? Let’s look at your biggest Super Annuation Fund, The Super Australia. This is an industrial fund that currently manages about 75 billion Australian Dollars. In 2010, the Super Australia reported that 18-20 percent of their entire fund is to be allocated to offshore investments. Investment instruments reliant on countries OTHER THAN Australia. In 2015, the Super Australia reported to have 38-40 percent of their entire fund capital allocated towards offshore investments. All Super Annuation’s have done this already. They are moving a large portion of the Australian people’s funds offshore. Why? To hedge for the up and coming financial crisis. But, when it does occur, since only 40 percent is offshore, you will be liable to 60 percent of your entire account. The same thing happened in the 2008 Financial Crisis in the United States of America and the United Kingdom. 

 

We provide all the necessary solutions for you to protect your exposed funds and simultaneously profit from the lucrative economic environment through our Asset Managers.  

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