Page 1 of 3

Christine St Anne is Morningstar's online funds and ETFs editor.

The never-ending shifts in global markets are more than enough to test the confidence of investors. One would suspect that a certain level of courage is needed for those who are responsible for managing billions in retirement savings on behalf of millions of Australians.

Sunsuper chief investment officer (CIO) David Hartley looks after $18 billion on behalf of 1 million members. AustralianSuper CIO Mark Delaney manages more than double that, overseeing around $42 billion in funds under management with 1.8 million members.

Despite the huge sizes of these funds, managing billions of dollars during testing markets is all about sticking to your investment approach, according to Delaney.

For Hartley, volatile markets can provide ample opportunities for his fund.

"We do operate a passive rebalancing portfolio that requires us to buy assets that have gone down in value and sell assets that have increased in value. The volatile markets give us opportunities to buy low and sell high," Hartley says.

"This has allowed the fund to perform around our peer group during positive markets, but we significantly outperform during down markets."

Similarly, Delaney sees attractively priced assets in deteriorating market environments, but notes that it is important to have a clear idea of which asset classes are becoming attractively priced and to not buy those assets too early.

Of course, Delaney and Hartley are not the sole managers for their respective funds. These CIOs have a group of internal investment professionals who support them. In addition, AustralianSuper and Sunsuper have hired external asset consultants that provide investment research and advice.

People and processes

Overseeing superannuation funds worth billions entails the supervision of a multitude of investment managers. Sunsuper has appointed over 40 mangers to its fund, while AustralianSuper has over 100 investment managers in its investment portfolio.

Monitoring of these managers is carried out on a regular basis. A number of internal investment team members are also appointed to oversee each asset class, such as Australian equities and fixed income.

"After selecting our investment managers, we assess them on a regular basis and address any emerging issues that may arise," Delaney says.

Hartley gives his team members the responsibility of managing their strategies. Once the strategy is approved by Sunsuper's board, the fund's portfolio manager has the "responsibility and ownership in what they do".