Where are super funds investing in 2025?

Last month, Aware Super made a $1.6-billion investment in a singular industrial property transaction in Melbourne’s North precinct. It’s a huge commitment to both the Victorian market and the asset class, taking its many members’ capital and injecting it into a real estate position that will now likely far exceed its standing from previous years. 

The investment is in the Melbourne Intermodal Terminal (MIT), a key piece of infrastructure for Victoria that’ll serve as a hub between freight and rail, boosting the state’s supply chain. And such a big play into the industrial market might make you wonder: what does it say about where super funds are investing in 2025? 

Where are Australian super funds investing in 2025?

The superannuation industry is rife with retail funds that typically invests in asset classes they know like the back of their hands. While much of their investment allocations will mirror that of previous years, it’s worthwhile combing through the major investments being sought out by the major funds. 

Equities

Equities (shares) have always been a major part of Australian super funds’ asset allocation, with most investing up to 50 per cent of their members’ super in both overseas and domestic equities. 

The same is likely to continue into 2025. Why? Well, keep in mind that super funds answer to both shareholders and members, and a complete pivot in their asset allocation would be an extreme measure most wouldn’t be willing to take. Super funds are large ships, their rudders slow to navigate them and their passengers into new waters. 

All this said, many super fund C-suites are suggesting global and local equity returns would sit in single digits over the next decade, according to the Australian Financial Review. 

Tech and AI

Unsurprisingly, super funds are watching the US closely and seeing the dramatic foreign investment into the US market’s tech sector. These are the sectors seeing more super fund capital, with share prices steadily growing in line with the trend of AI, data and technology companies. 

This will only bolster as more companies—Australian business included—adopt automation and AI technology as part of their offering or their processes. 

Real estate

While shares, both domestic and international, are the usual major investment classes for super funds, real estate is appealing to far more funds these days—after all, their members (who funds are answerable to) see the benefit of real estate, with the nation’s residential markets seeing immense growth in the years since COVID. 

Commercial real estate is returning to super fund investment mandates, as many analysts in the super industry see values lifting. MLC’s CIO Dan Farmer said they were attracted to investment opportunities in real estate, given the low prices found in particular commercial sectors. The sentiment is shared by AMP.

Cash

Market uncertainties, much of them led by the global tariffs imposed by US President Donald Trump, have driven funds to increase their cash and fixed income holdings. The liquidity and historic stability is what justifies this play, and is a reminder of the importance of diversification for many investors. Cash mightn’t be the “sexiest” investment, but there’s plenty of reason to place your money in proven and secure investments (whether cash, fixed income or even a property syndicate).

ESG investments

An investment class that’ll be new to many long-time investors’ ears, Environmental, Social & Governance investments are playing an increasing role in the investment strategies of super funds. From climate change to cultural heritage, super funds are investing in stocks that cater to the solution of a range of global issues.  

Integrating social and environment-centric investments not only bolsters the image of super funds but their bottom line, too. After all, there’re few more relevant topics in the political and social sphere than ESG. 

Super funds seeing the light in property

Retail funds are typically forced to invest in highly liquid assets, enabling them to divest quickly if their analysts detect rapid movement in the market. We actually see the benefit of an illiquid investment, and it seems many more super funds are too. 

Aware Super chief executive, Deanne Stewart, said this on their investment into 99 hectares of Melbourne industrial property: “This investment will not only generate strong returns for our members, but illustrates the transformative power of private capital when deployed responsibly and with a long-term vision.”

As long-term investors in high-quality commercial real estate, we couldn’t agree more. Responsible investment in real estate, applying strict property fundamentals and following a well-understood strategy can be extremely favourable for those involved. 

There’s evidence beyond their investment portfolio, with several major Aussie super funds—namely AustralianSuper, Aware and Cbus—embarking on ownership of real estate companies. Indeed, Aware Super made their $1.6-billion industrial acquisition via their real estate company, Aware Real Estate. 

Does real estate belong in your portfolio? 

It all depends on your own financial situation and your investment appetite. 

Super funds differ from regular investors and investment companies in so many ways. Like institutional investors, they adhere to standards set by in-house policies, regulations and self-imposed mandates, making it incredibly difficult to proactively find opportunities in the real estate market when they see fit. 

Regular investors don’t typically have those restrictions. And one way Australians are joining the real estate market is by investing in property syndicates. 

For us, as exclusive property investors, we’re able to see the value in particular markets, precincts and asset classes and hunt for the best possible opportunities that’ll reward us and our investors. 

So, if you’re looking for secure returns in a stable asset class, consider talking to us about investment in an Australian property syndicate. We’re always looking for new investors to join us as co-owners in high-quality commercial property. 

Get in touch with us today for an obligation-free chat or subscribe to receive our investment updates, and we’ll let you know when our next investment opportunity is around the corner.