ENGAGEMENT

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STOCK PRICE OVERREACTION TO ESG CONTROVERSIES

BEI CUI, PAUL DOCHERTY

There has been substantial growth in incorporating environmental, social and governance (ESG) issues into investment decisions. This trend has been motivated by the societal benefits of socially responsible firms having access to cheaper capital. While the benefits of ESG investing are apparent, we investigate the possible downside of the trend towards ESG by examining how this approach might affect market efficiency. ESG is now a highly salient aspect of investors’ information sets. Given cognitive limitations, investors might devote substantial resources to examining ESG characteristics to the detriment of other firm fundamentals.

THE RETIREMENT PUZZLE

UMMUL RUTHBAH

Present-day retirees may not be as well off as they expect to be during retirement. Given the current state of the world – higher life expectancy, close to zero real interest rates, and the economic turmoil caused by the COVID-19 pandemic, a superannuation fund balance as large as $545,000 may not be enough to support a comfortable lifestyle. Besides, the means-tested age pension results in cases where spending at retirement does not increase proportionally with assets, providing incentives for a broad spectrum of people to deplete their superannuation in the early years of retirement, with significant negative consequences for government finances.

SELF-MANAGED SUPER FUNDS

YOLANDA WANG

This project analyses the investment performances of tens of thousands of selfmanaged superannuation funds over seven years. The research reveals that Australian equities portfolios of self-managed funds had low levels of diversification and liquidity, and many did not beat the market.

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RETIREMENT INCOME REVIEW CONSULTATION

UMMUL RUTHBAH, NGA PHAM, BONSOO KOO

The Federal Treasury has commissioned our Centre to work on the following two consultation projects for the Government’s Retirement Income Review. These projects are aimed at helping to establish the fact base for the review panel.

THE RELATIONSHIP BETWEEN VOLUNTARY SAVINGS AND CHANGES TO THE SUPERANNUATION GUARANTEE

UMMUL RUTHBAH, NGA PHAM

This study examines how the compulsory employer superannuation system interacts with voluntary savings. The study focuses on the extent to which the existence of compulsory superannuation – and increases in the compulsory superannuation rate – might affect voluntary savings.

HOW EFFECTIVE ARE SUPERANNUATION TAX CONCESSIONS IN ENCOURAGING ADDITIONAL SAVINGS?

UMMUL RUTHBAH, NGA PHAM

This report examines empirical evidence on the impact of the superannuation tax concessions on voluntary private savings in Australia. Do superannuation tax concessions lead to reductions in other forms of savings? And what are the net outcomes?

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ENGAGEMENT

Members of our team engaged widely at events with industry and academic partners throughout 2019, helping to lift the profile of our organisation and sustaining the two-way exchange of knowledge between academia and industry that underpins our industry-relevant, results-oriented approach to finance research.

SMSF ASSOCIATION NATIONAL CONFERENCE

20–22 FEBRUARY 2019

Nga Pham attended the SMSF Conference at the Melbourne Exhibition Centre hosted by the SMSF Association. There were industry presentations by various stakeholders in the SMSF sectors on the investment strategies and performance of SMSFs, as well as regulatory changes affecting the industry.

FUTURE OF FINANCE SEMINAR, CFA INSTITUTE

7 MARCH 2019

The seminar, which was organised by the CFA Society Melbourne and Nga Pham attended, presented the outcomes of the Future of Finance research and how finance professionals should be prepared.

Q-GROUP COLLOQUIUM 2019

29 MARCH 2019

Deep Kapur participated in a panel discussion about factor trading strategies and convergence or divergence of ESG data. The Monash Centre organised the event for Quantitative Finance and Investment Strategies. Nga Pham also attended the event.

ACFS SEMINAR ‘TECHNOLOGY STRATEGY IN THE FINANCIAL SECTOR’

10 APRIL 2019

The Centre organised a free seminar presented by Professor Pinar Ozcan - Warwick Business School (UK), and Associate Professor Pitosh Heyden, Department of Management, Monash Business School. The speakers discussed how the longterm future of incumbent firms in the financial sector might depend on how successfully they develop and execute an appropriate technology strategy that deals with threats from new players.