Almost every Australian of working age has a superannuation fund, as is required by law. Each week (or fortnight or month), a proportion of our pay packets is diverted into this retirement fund, locked up until that glorious day when we sail off into the sunset of our golden years.
Given superannuation has been around since the early 1990s, we are talking about quite the pot of gold here. Our superannuation sector is dominated by a handful of gigantic fund managers who enjoy ever-increasing clout in our investing markets thanks to the sheer size of their funds under management.
So when one $139 billion fund abandons a top ASX 100 stock, it's worth examining further.
Super funds invest a lot of their members' money into ASX shares. The proportions and allocations differ from fund to fund, of course. Some funds take an active approach and select what they think are the best stocks for their members. Others use passive investing strategies like buying index funds. Some funds use a combination of both strategies.
This week's big news comes from super fund UniSuper.
According to reporting in the Australian Financial Review (AFR), UniSuper has just sold the last of its stake in ASX 100 stock APA Group (ASX: APA).
Super fund sells out of top ASX stock
APA is a gas pipeline operator with a market capitalisation of roughly $9.5 billion. It is a popular choice for many income investors due to its high, predictable, and reliable dividends.
UniSuper was formerly one of this company's largest investors, owning a 9.97% stake at one time.
However, the report reveals that UniSuper has just closed out of the company, offloading its final $340 million just this morning at an average price of $7.23 per share.
This follows a huge $500 million sell-down back in October.
Now, it's not clear why UniSuper has lost confidence in its investment in this ASX 100 stock. It could have something to do with a desire to divest from 'fossil fuel' stocks, which many super fund members could be pressing for.
Following the October sale, UniSuper reportedly denied this characterisation at the time, with chief investment officer John Pearce arguing that the sell-down was due to a "rebalancing from APA shares to unlisted infrastructure and property assets within the defined benefit division". Perhaps UniSuper has changed its mind.
Or perhaps it could just come down to investing fundamentals, with UniSuper perhaps seeing better investment opportunities elsewhere.
Either way, we do know that UniSuper has abandoned its investment in this ASX 100 stock. Let's see what happens next.
