(Bloomberg) -- AustralianSuper Pty posted its first annual loss since the global financial crisis as the country’s largest pension fund adjusts to a more defensive strategy that puts less emphasis on stocks.

The company’s balanced option returned -2.73% in the financial year that ended June 30, according to a statement Monday. The result was impacted by challenging global investment conditions, heightened geopolitical tensions, rising inflationary pressures and interest rates over the past six months, the statement said.

“After more than 10 years of economic growth our outlook suggests a possible shift from economic expansion to slowdown in the coming years,” Mark Delaney, the firm’s chief investment officer, said in the statement. “In response, we have started to readjust to a more defensive strategy, as conditions become less supportive of growth asset classes such as shares.”

Investment managers around the world have been hit by a slide in global equities and a drop in bond prices over the past 12 months as major central banks ratchet up interest rates and stock valuations come under pressure. 

The balanced option handed investors 10-year annual average returns of 9.32%, on the back of a 20.4% return in 2021, the firm said. Delaney said the economic cycle was changing and he expects returns to be more modest over the medium term. AustralianSuper manages more than A$261 billion ($178 billion). 

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