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Two of Australia's largest pension funds pulled money out of Chinese stocks and boosted positions in the country's fossil fuel sector in the final six months of 2022, according to filings published on Thursday.
The value of China and Hong Kong listed equities at AustralianSuper and Aware Super, which collectively manage about A$400 billion ($267.24 billion), fell by about a quarter respectively, according to mandatory portfolio disclosures published on fund websites and analysed by Reuters. Total share counts also fell.
Both funds collectively increased their shareholdings in Woodside Energy Group, Australia's largest independent natural gas producer, by roughly 14 million shares.
With offices in London and New York and growing teams of stock pickers, Australia's A$2.3 trillion pension sector is muscling onto the world stage and the disclosures reveal how the country's largest investors are positioning on China and transition to renewable energy.
The disclosures come just days after activist investors accused the big Australian pension funds of failing to push fossil fuel producers like Woodside hard enough to decarbonise.
More than two years after selling the stock from its actively managed portfolio, AustralianSuper grew the number of shares in thermal coal producer Whitehaven Coal by about 40%, for a total position of A$21 million via an external mandate with IFM Investors.
Reuters analysed public mandatory portfolio disclosures covering listed equity investments for the six months to 31 December in each fund's default investment option, which contain the bulk of assets under management.
AustralianSuper works with firms to understand "how the company plans to transition its operations to deliver long-term value in a low-carbon economy," the fund said in a response to Reuters. Gas was an important transition fuel, a spokesperson added.
The figures reveal pension funds pulling back from China during the back half of 2022, a time when investors across the developed world were reconsidering exposure to a country still subject to strict COVID lockdowns.
Aware Super, which manages roughly A$150 billion on behalf of 1.1 million members, slashed its exposure to China-listed equities from around A$420 million to near the A$230 million mark. The number of shares owned also fell.
Aware Super said in a statement it had a "relatively small exposure" to China mostly via external managers.
"Our approach within China, and more broadly in listed and private equities markets, is reviewed regularly and adjusted according to risks and opportunities," a spokeswoman said.
($1 = 1.4968 Australian dollars) (Reporting by Lewis Jackson Editing by Shri Navaratnam)