By Nick Hedley
Hostplus, one of Australia’s largest superannuation
funds with A$81 billion (US$55 billion) under management, has delivered the industry’s
best returns on both a one-year and a 10-year time horizon, according to statistics
from research firm SuperRatings.
The rankings consider the performance of 50 balanced funds –
those with exposure to growth assets of between 60% and 76% – for the year and decade ended June 30. SuperRatings found
that Hostplus’ balanced option was one of only three funds to deliver positive
returns over 12 months, alongside QANTAS Super’s growth offering and
Christian Super’s MyEthicalSuper option.
Hostplus’ balanced fund returned 1.6% for the year, and 9.7%
per annum over a 10-year period – the sector’s best performance on both time
horizons.
AustralianSuper’s competing product ranked second over 10
years, followed by Australian Retirement Trust and Cbus.
Hostplus, which recently bulked itself up by merging with
Statewide Super, said in a statement that its preference for active investment
management had given it the edge over its peers. The fund targets workers in
the hospitality, tourism, recreation and sports industries.
Hostplus CEO David Elia said: “Actively managing and
applying a strategic asset allocation to perform under different market
conditions enables us to smooth out returns over the longer term, as opposed to
some of the lower cost, passive products in the marketplace where investors are
more exposed to market movements.”
Chief investment officer Sam Sicilia said that in
2015, Hostplus decided to significantly reduce its exposure to bonds in the
belief that bond portfolios would not provide downside protection during the
low-interest-rate environment.
“We instead chose to invest in mid-range defensive assets
such as infrastructure and unlisted assets,” Sicilia said. “Being overweight in
assets such as property and infrastructure provided all-important inflation protection.”
Meanwhile, Hostplus’ Socially Responsible Investment Option
also delivered positive one-year returns. This showed that when constructing
sustainable funds, “it is not just what you exclude, but what you include that
makes the biggest impact,” Sicilia said.
Hostplus has investments in clean energy companies including
Commonwealth Fusion Systems and First Light Fusion.
QANTAS Super’s CIO, Andrew Spence, attributed the
firm’s positive one-year returns to “diversification, risk management and investment
governance.”
AustralianSuper’s CIO, Mark Delaney, said the fund
was taking on a more defensive strategy as conditions were becoming less
supportive of growth assets.
Kirby Rappell, executive director of SuperRatings, said:
“While the 2022 financial year has seen super funds record a modest fall, the
benefits of diversification have shone through. When we compare returns for
equity, bond and listed property markets to balanced style portfolios among
super funds, these results should be reassuring to members.
“Superannuation is a long-term investment and patience
remains key. For those Australians under 50, the recent market volatility is
not expected to have any impact on their retirement. This year’s results are
just one out of a 30- to 40-year investment for younger Australians.”