Students gain real world experience with Unisuper
Thursday, 29 August 2013
Australian School of Business students have been given real world experience of the investment market by UniSuper, which has flown in their experts from Melbourne for a half-day class in asset management with 17 finance undergraduates in Sydney's CBD.
John Pearce, the CIO of UniSuper, reminded students that conventional wisdom may not work in reality when you work at a superannuation fund. He said "there is a belief that equities outperform bonds in the long run, however in Japan there has been a totally contradictory experience. Others believe that gold will be a natural bet as people buy gold to hedge against inflation - but what about the recent US experience, which has proved anything but, and where the belief that Quantitative Easing will lead to inflation has been proved to be unfounded? Students need to consider all these scenarios."
He warned students that although the market is efficient, "fear and greed can distort markets". He says this creates investment opportunities. "The recent action by the Federal reserve to keep interest rates at artificially low levels has led the markets to misallocate capital."
He had one other tip for students. "Capital allocation to different countries should in theory increase with their GDP growth. However that hasn't always been proved to be the case," he said. "The spectacular growth in China had not translated into superior growth in their stock market index when compared to other countries."
Simon Hudson, the Head of Equities at UniSuper, gave students a grounding on why Australian equities appeal to investors, and reminded them of the key drivers of equity returns and a framework of equity valuation. He said "industrialisation was the key driver for equities in the past and from what we see of China and India, industrialisation has still a long way to go. This will support equity market performance for a long haul."
The Australian School of Business' Lecturer Henry Yip who organised the session said "this was an excellent example of the university indulging in real-world teaching. Students were shown by senior investors that the markets don't always work as you would expect. Unisuper has given real value for students."
For further information contact Lecturer
Henry Yip on 02 9385 5870 or
Media contact: Julian Lorkin: 02 9385 4704