Hostplus Ranked Best-Performing Australian Super Fund over Short and Long Term

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.”