Australia has a trillion dollars worth of superannuation funds under management but less than 0.01 per cent is invested in Australian agriculture, according to Australian Agribusiness Group.

It says international pension funds have recognised the local value proposition and invested more than $1.5 billion (about three times the local total) into Australian agriculture.

And it says that if Australian superannuation funds had invested in Australian agri, their members would have been buffered from the super slaughter of the global financial crisis.

AAG executive chairman, Marcus Elgin, said the GFC wiped out 27pc of Australian’s superannuation contributions.

“If some of the money managed by superannuation funds was invested in the top 25pc of agriculture, then those funds would not have suffered as much a loss of value,” Mr Elgin said.

“It is proof of the simplest idea of reducing risk through diversification.”

Most Australian superannuation funds have yet to acknowledge that the top 25pc of Australian agriculture is a viable investment option, despite it providing 11.2pc returns over the last 12 years but with only one third of the volatility of the All Ordinaries, according to the AAG.

“Superannuation funds should acknowledge agriculture acts as a ‘shock absorber’ during difficult times because of its negative correlation to major asset classes such as Australian and international shares, low volatility and it’s slower investment cycle,” Mr Elgin said.

“Agriculture is a stable, low volatility, tangible asset.

“Australia is a globally competitive agricultural player, in a context where the fundamentals of the need for an increasing food supply are unquestionable. Remember – if you don’t eat, you die.”

Source: http://fw.farmonline.com.au/news/nationalrural/agribusiness-and-general/finance/why-arent-super-funds-investing-in-ag/1688335.aspx?src=enews

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