Income Stream investment options

Thinking of retiring? We offer 10 flexible Income Stream investment options which can pay you a regular income before and during your retirement.


choose from one of our diversified investment options 

 

Whether you're a new or an experienced investor, we've made it easy to select an investment strategy to help fund the retirement lifestyle you deserve. 

If you don't make an investment choice when you join, you'll automatically be invested in the HESTA Income Stream Ready-Made Investment Strategy. It's made up of a mix of the Balance and Defensive investment options.

For more information please see
HESTA Income Stream Ready-Made Investment Strategy.

 

Investment objectives

 

  Retirement Income Stream            Transition to Retirement (TTR) Income Stream 

Medium-term (5 years)

CPI + 3.0% CPI + 2.5%
Long-term (10 years) CPI + 3.5% CPI + 3.0%

 

Balanced aims to produce a return of 3.5% (after-tax return of 3.0% for TTR) above CPI over the long term. Returns may vary substantially from year-to-year and this option may occasionally produce a negative return.

                             

Type of investor this option may suit

Assertive

 

Strategy

Balanced invests in a diversified mix of asset classes, with 65.3% invested in growth style assets, including listed shares and the remainder invested in defensive style assets, like cash, defensive property and global debt. Infrastructure assets provide a mix of both growth and defensive characteristics. The inclusion of infrastructure should give Balanced a lower risk profile than if the growth assets were all listed shares.

 

Probable number of negative annual returns over 20 years

3 to less than 4

 

Suggested minimum investment timeframe

5 to 7 years

 

 

Investment objective

 

  Retirement Income Stream             Transition to Retirement (TTR) Income Stream 

Medium-term (5 years)

CPI + 1.5% CPI + 1.0%
Long-term (10 years) CPI + 2.0% CPI + 1.5%


Defensive aims to produce a return of 2.0% (after-tax return of 1.5% for TTR) above CPI over the long term. Negative returns can occur, but generally occur very infrequently.

 

Type of investor this option may suit

Defensive

 

Strategy

Defensive invests in a diversified mix of asset classes, with 22.5% invested in growth style assets, like listed shares and 77.5% invested in defensive style assets, like cash, term deposits, defensive property and global debt. Infrastructure assets provide a mix of both growth and defensive characteristics. The diversification and defensive asset bias of this option means that it has a lower risk profile than Conservative, while its exposure to some growth assets should provide a small amount of protection against inflation.

 

Probable number of negative annual returns over 20 years

Less than 0.5

 

Suggested minimum investment timeframe

1 to 3 years

 

 

Investment objective

 

  Retirement Income Stream         Transition to Retirement (TTR) Income Stream 

Medium-term (5 years)

CPI + 2.0% CPI + 1.5%
Long-term (10 years) CPI + 2.5% CPI + 2.0%

 

Conservative aims to produce a return of 2.5% (after-tax return of 2.0% for TTR) above CPI over the long term. There may be some year-to-year variation in returns, with negative returns occurring infrequently.

 

Type of investor this option may suit

Moderate

 

Strategy

Conservative invests in a diversified mix of asset classes, with 32.5% invested in growth style assets like listed shares, and approximately 67.5% invested in defensive style assets including cash, term deposits, defensive property and global debt. Infrastructure assets provide a mix of both growth and defensive characteristics. The diversification and defensive asset bias of this option means that it has a lower risk profile than either the Balanced or Active options, while its exposure to some growth assets should provide some protection against inflation.  

 

Probable number of negative annual returns over 20 years

1 to less than 2

 

Suggested minimum investment timeframe

3 to 5 years

 

 

Investment objective

 

  Retirement Income Stream          Transition to Retirement  (TTR) Income Stream

Medium-term (5 years)

CPI + 3.5% CPI + 3.0%
Long-term (10 years) CPI + 4.0% CPI + 3.5%

 

Eco aims to produce a return of 4.0% (after-tax return of 3.5% for TTR) above CPI over the long term.

Eco aims to optimise long-term returns while investing in companies that demonstrate best practice sustainability performance within their industry sector, relative to their peers. This option may produce negative returns quite frequently due to its high allocation of listed shares.

 

Type of investor this option may suit

Aggressive

 

Strategy

Eco invests in companies with superior envitronmental, social and governance performance as assessed by our managers. Eco has investment exclusions concerning uranium, fossil fuels, tobacco and controversial weapons. Property investments are screened to ensure they meet appropriate environmental requirements. Currently, the Private Equity investments are in Cleantech.  See HESTA Product Disclosure Statement for further information.

 

Probable number of negative annual returns over 20 years

4 to less than 6

 

Suggested minimum investment timeframe

7 to 10 years

 

 

Investment objective

 

  Retirement Income Stream          Transition to Retirement  (TTR) Income Stream

Medium-term (5 years)

CPI + 4.0% CPI + 3.5%
Long-term (10 years) CPI + 4.5% CPI + 4.0%


Active aims to produce a return of 4.5% (after-tax return of 4.0% for TTR) above CPI over the long term. This option may vary substantially year-to-year and produce a negative return quite frequently.

 

Type of investor this option may suit

Aggressive

 

Strategy

Active offers a diversified asset portfolio, investing predominantly in growth style assets like listed shares, while maintaining a balance of defensive assets like defensive property and cash. In addition, infrastructure assets are included, which provide a mix of both growth and defensive characteristics. The diversification of asset classes means this option has a lower risk profile than an investment in shares alone.

 

Probable number of negative annual returns over 20 years

4 to less than 6

 

Suggested minimum investment timeframe

7 to 10 years

 

 

 

design your own portfolio

 

While sector-specific investment options don't offer the same level of asset class diversification as the diversified options, they've been designed to provide targeted exposure to specific asset classes.

 

Investment objective

Over the long term, to earn a return (after-tax for TTR) after investment fees and indirect costs, equivalent to or higher than the retun (net of tax## for TTR) of the Bloomberg AusBond Bank Bill Index. Cash is the most conservative of the HESTA Income Stream investment options.

 

Type of investor this option may suit

This option may suit an investor seeking to create their own diversified portfolio, who would like to include cash and cash products.

 

Strategy

Cash is primarily invested in at-call bank deposits, along with an allocation to short-term (less than 12 months) term deposits with highly rated banks. It may include a small allocation to other cash investments.

 

Probable number of negative annual returns over 20 years

Less than 0.5

 

Suggested minimum investment timeframe

<1 year

 

## Estimated tax rate provided by independent investment consultant.

 

Investment objective

Over the long term, to earn a return (after-tax for TTR) after investment fees and indirect costs, equivalent to or higher than the retun (net of tax## for TTR) of the Bloomberg AusBond Bank Bill Index. Term Deposits are more conservative than most other HESTA Income Stream investment options, with the exception of Cash.

 

Type of investor this option may suit

This option may suit an investor seeking to create their own diversified portfolio, who would like to include term deposits.

 

Strategy

The Trustee will seek to invest in a diversified range of term deposits to enable flexibility to achieve the highest rates possible while managing reinvestment risk.

 

Probable number of negative annual returns over 20 years

0.5 to less than 1 

 

Suggested minimum investment timeframe

<1 year

 

## Estimated tax rate provided by independent investment consultant.

Investment objective

Over the long term, to earn a return (after-tax for TTR) after investment fees and indirect costs, equivalent to or higher than CPI + 3.5% (CPI + 2.75% for TTR). Property is less conservative than Cash or Term Deposits because it has a higher possibility of producing a negative return from time to time.

 

Type of investor this option may suit

This option may suit an investor seeking to create their own diversified portfolio, who would like to include property.

 

Strategy

Property is invested primarily in unlisted property and property debt with a 15.0% holding in cash products. The primary characteristic of the unlisted property will be that rental income is expected to generate the majority of the returns, not capital growth.

 

Probable number of negative annual returns over 20 years

2 to less than 3

 

Suggested minimum investment timeframe

3 to 5 years

 

 

Investment objective

Over the long term, to earn a return (after-tax for TTR) after investment fees and indirect costs, equivalent to or higher than the retun (net of tax## for TTR) from the combination of:

  • 95.0% S&P/ASX 300 Accumulation Index (adjusted for tax credits)
  • 5.0% Bloomberg AusBond Bank Bill Index

Australian Shares aims to produce long-term returns primarily from capital gains, but carries the risk of negative returns quite frequently.

 

Type of investor this option may suit

This option may suit an investor seeking to create their own diversified portfolio, who would like to include Australian shares.

 

Strategy

Australian Shares option is invested primarily in listed Australian shares. It may at times hold a small percentage of its assets in shares of companies not listed on the Australian Stock Exchange. It may include managers who also short sell shares.

 

Probable number of negative annual returns over 20 years

4 to less than 6

 

Suggested minimum investment timeframe

7 to 10 years

 

## Estimated tax rate provided by independent investment consultant.

Investment objective

Over the long term, to earn a return (after-tax for TTR) after investment fees and indirect costs, equivalent to or higher than the retun (net of tax## for TTR) from the combination of:

  • 73.6% MSCI World ex-Australia Index $A Net Dividends Reinvested
  • 21.4% MSCI Emerging Markets Index in $A Net Dividends Reinvested
  • 50/50 $A Hedged/unhedged
  • 5.0% Bloomberg AusBond Bank Bill Index

International Shares aims to produce a long term return primarily from capital gains but carries the risk of producing negative returns quite frequently.

 

Type of investor this option may suit

This option may suit an investor seeking to create their own diversified portfolio, who would like to include international shares.

 

Strategy

International Shares is invested primarily in listed international shares. The currency exposures in International Shares are managed under HESTA’s active currency overlay program policy. It may include managers who also short sell shares.

 

Probable number of negative annual returns over 20 years

4 to less than 6

 

Suggested minimum investment timeframe

7 to 10 years

 

## Estimated tax rate provided by independent investment consultant.

Information as at 1 July 2019.

 

 

latest returns

HESTA Income Stream

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Transition to Retirement

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HESTA Income Stream investment managers

 as at 30 June 2019

 

We engage a range of professional fund managers to invest members’ money according to specific objectives and strategies. See our full list below.

We have the discretion to change managers at any time in accordance with its investment strategies.

 

 

Investment Manager Investment Manager ABN
(if available)
Colonial First State Global Asset Management 89 114 194 311
Industry Funds Management Pty Ltd 67 107 247 727
JP Morgan Chase Bank, N.A.     43 074 112 011
State Street Global Advisors, Australia, Limited     42 003 914 225

 

Investment Manager Investment Manager ABN
(if available)
BlackRock Asset Management (Australia) Limited 13 006 165 975
Pendal Group Limited 17 126 390 627
PIMCO Australia Pty Limited 54 084 280 508

 

Investment Manager Investment Manager ABN
(if available)
AEW Capital Management, L.P. n/a
EG Funds Management Pty Ltd 22 108 198 492
Eureka Funds Management Limited 47 107 346 841
Franklin Templeton Investments Australia Limited 87 006 972 247
Heitman Capital Management, LLC  
Investa Wholesale Funds Management Limited 16 149 681 390
ISPT Pty Ltd 28 064 041 283
IIPT Pty Ltd 22 103 498 424
MSREF V International-GP, L.L.C. n/a
Nuveen Management AIFM Limited  n/a
QIC Property Management Pty Ltd 43 076 279 359
Scarborough Pacific Group Pty Limited 52 140 660 975
Stride Property Limited n/a

 

Investment Manager Investment Manager ABN
(if available)
Artisan Partners Limited Partnership n/a
Baillie Gifford Overseas Limited n/a
BlackRock Investment Management (Australia) Limited 13 006 165 975
Citigroup Global Markets Australia Pty Limited 64 003 114 832
Copper Rock Capital Partners LLC n/a
Generation Investment Management LLP n/a
Hexavest Inc n/a
Industry Funds Management Pty Ltd 67 107 247 727
Lazard Asset Management Pacific Co 13 064 523 619
Martin Currie Investment Management Limited 83 131 134 613
Robeco Hong Kong Limited 50 436 122 863
Russell Investment Management Limited 53 068 338 974
RWC Asset Management LLP n/a
Sanders Capital LLC n/a
Somerset Capital Management n/a
Stewart Investors 89 114 194 311

 

Investment Manager Investment Manager ABN
(if available)
Airlie Funds Management Limited 75 159 022 974
Allan Gray Australia Pty Limited (formerly Orbis) 48 112 316 168
Citigroup Global Markets Australia Pty Limited 64 003 114 832
Cooper Investors Pty Limited 26 100 409 890
Ellerston Capital Limited 34 110 397 674
Greencape Capital Pty Ltd 98 120 328 529
Industry Funds Management Pty Ltd 67 107 247 727
Pendal Group Limited 17 126 390 627
Plato Investment Management 77 120 730 136
Renaissance Smaller Companies Pty Ltd 88 103 874 102
Schroders Investment Management Australia Limited 22 000 443 274
Solaris Investment Management Limited 72 128 512 621
Yarra Funds Management Limited 63 005 885 567

 

Investment Manager Investment Manager ABN (if available)
Industry Funds Management Pty Ltd 67 107 247 727
Kohlberg Kravis Roberts & Co. L.P. n/a
Morrison & Co Utilities Management (Australia) Pty Ltd  66 624 308 809
Palisade Investment Partners Limited 32 124 326 361 
Pacific Equity Partners Pty Ltd 62 082 283 949
Stafford Timberland Limited n/a

 

Investment Manager Investment Manager ABN (if available)
Advent Partners Pty Ltd 29 006 235 632
Adveq Management AG n/a 
Allegro Funds Pty Ltd 28 128 866 053
Brandon Capital Partners Pty Ltd 82 128 415 903
Coller Investment Management Limited n/a 
FSN Capital Partners AS n/a 
FTV Management Company, L.P. n/a 
Generation Investment Management LLP n/a 
Grey Mountatin Partners LLC n/a 
Industry Funds Management Pty Ltd 67 107 247 727
JMI Management Inc n/a 
Leapfrog Investments Group Ltd n/a 
Lexington Advisors Inc n/a 
Littlejohn & Co., LLC n/a 
Madison-India Management Advisors Private Limited n/a 
Newbury Partners LLC n/a 
Oaktree Capital Management, L.P. n/a 
PAG Asia Capital Limited n/a 
Performance Equity Management, LLC n/a 
Providence Equity Partners n/a 
Rio Energy Management LLC n/a 
Roark Capital Management  LLC n/a 
Stafford Fund Nominees Pty Ltd 21 113 939 325
Stafford Private Equity Pty Ltd  31 094 669 940
Stafford Private Equity Inc n/a 
Siguler Guff Advisers, LLC n/a 
Stone Point Capital LLC n/a 
TDR Capital, LLP n/a
Vencap Limited n/a 

 

Investment Manager Investment Manager ABN            
(if available)
Barings LLC n/a
Industry Funds Management Pty Ltd 67 107 247 727
Westbourne Credit Management Limited 27 131 843 144

 

Investment Manager Investment Manager ABN
(if available)
Lee Overlay Partners Limited n/a
ME Portfolio Management Limited 79 005 964 134
Insight Investment Management Limited n/a

 

 

what's next?

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