Australian Superannuation funds lose money in Peabody coal bankruptcy

The demise of Peabody

Unless you're like David and I that a while back divested from the default fund to the Green fund. It's been performing quite well actually since then and competitive with the default fund. Nearly 10% a year on average. IMO it's performance will only get better as the world turns to green energy. Anyone who continues to invest in fossil fuels is a fossil fool. Who wants their Super going the way of the above graph?

I turns out that Super funds in Australia are very exposed to the Peabody bankruptcy, and that many Australians will find their super fund has lost money because of that. Peabody was the largest coal company in the US, until now. It's gone bankrupt.

My advice to Australians is to see what green fund options are available with your Super company and switch your money to that. Generally you're able to do it online, well with Australian Super you can. 

Comparison between Australian Super default "Balanced" fund and the green "sustainable" balanced since 2010

The largest coal miner in the United States, Peabody Energy Corp, on Wednesday revealed in regulatory filings to the Securities and Exchange Commission (SEC) that there were doubts it could continue as a going concern. As such, it may voluntarily seek protection under Chapter 11 – in other words, bankruptcy. Peabody elected not to pay $71 million in interest payments due yesterday, leaving it 30 days to find the money. 

Markets reacted as expected – Peabody shares plunged up to 49%, after losing 97% of their value in past year. Peabody corporate debt continues to trade at less than 10% of its face value. 

What does this mean for Australian investors? Well, it’s likely that thanks to the continued negligence of Australia’s superannuation industry, many of us have lost money on Peabody’s dramatic decline. 

Most super fund managers would have their members believe that they have no exposure to Peabody Energy Corp. That may be the case today, but almost all funds would have had some exposure to the company in the last five years. Renew Economy