Speaking at the Calastone Connect Forum in Sydney this week, Aberdeen Standard Investments Australia managing director Brett Jollie said short-term liquidity should not factor into the major asset allocation decisions of super funds.
Super funds in Australia have members with 20-, 30- or 40-year timeframes, and as a result should not be concerned with short-term liquidity issues, Mr Jollie said.
If pension funds can get a "liquidity premium" from making a particular investment they should take up the opportunity, he said.
"If you can get a yield kicker through that and the potential for capital gains, then that's a great thing to do," Mr Jollie said – adding that the Australian investment industry in general is "too focused on short-term returns and investments".
Australians also need "better financial advice", he said.
"In a defined contribution system where we have investor choice and pension portability, the idea that you would switch your investments because markets dropped 2 per cent tomorrow is ludicrous," Mr Jollie said.
"We need to be taking longer term asset allocation decision[s]. We need to understand the risks of investing and the risks of retirement – longevity, inflation and sequencing – we need to think longer term.
"This deluge of data we that we get daily is just noise – we need to push that aside."
