A new wall of super money is set to radically alter Australia’s investment market and returns. The Australian market is being hit by a compounding wall of superannuation money, which we think will significantly alter the outlook and composition of returns for the next decade. This has serious implications for policy makers and investors in Australia. Increasingly, big super funds will struggle to find local investments. They will be forced to head offshore and into synthetic investments, such as derivatives. That will increase market volatility and dilute the impact of franking credits on their returns. We think that scenario will significantly increase the appeal of SMSF and self-directed investors, who will be able to maintain control of their investments and asset allocations. (VIEW LINK)