ART Increases Yen Position as U.S. Dollar Exposure Cuts
Australia's second-largest superannuation fund, The Australian Retirement Trust (ART), has made significant changes to its portfolio. ART increased its yen position while cutting U.S. dollar exposure across its portfolio.
The move reflects a defined view on interest rates and currency valuation. According to senior portfolio manager Jimmy Louca, the decision was based on relative value, energy costs, and monetary policy.
Louca believes that the drag from higher energy costs is already reflected in the exchange rate, and investors have placed too little weight on further Bank of Japan tightening.
The yen fell to 40-year lows in July, despite joint intervention by Japan and the United States. Louca estimates fair value near 150 yen per dollar, with the high 140s also possible.