market changes and your super

Life

The end of financial year returns to 30 June 2022 are in, and over the long term, HESTA investment performance has remained strong. Over the short term, it has been a challenging year for the world’s investment markets, and your returns this year might not be what you’re used to seeing.

 

When the world’s markets move, it’s natural to feel concerned about your investments. And HESTA has guided our members and their investments through some major market challenges over the years.

Knowing what’s happening across global financial markets and understanding what you – and HESTA – can control, can help keep short-term changes in context.

 

Where are we now?

Superannuation is a long-term strategy, and the long-term returns are strong for HESTA members. Our Balanced Growth (Super) option has delivered an average of 8.53% p.a. over the past 10 years, up to 30 June 2022*.

More recently, rising inflation, rising interest rates and geopolitical tensions have combined to create challenging short-term conditions for investors everywhere.

This year, the one-year performance for HESTA investment options has been lower than the long-term average.

Last financial year, Balanced Growth (Super) delivered an exceptional return of 19.03%. This year, Balanced Growth (Super) has returned -1.79%.

In fact, this was the first negative return for Balanced Growth (Super) since the 2009 Global Financial Crisis.

Similarly, for members in Income Stream, Balanced Growth (Income Stream) delivered a return last year of 19.79%. This year, Balanced Growth (Income Stream) has returned -4.09%.

We know this is not what you’re used to seeing with your HESTA account. However, we do expect and plan for some negative annual returns as a natural part of investing.

You can see our performance for all super investment options here.

 

Take a look at our performance

 

 

Keeping the big picture in mind

We understand negative returns can be concerning, particularly if you’re nearing retirement or are drawing an income stream from your HESTA account.

Returns like we saw last year are extraordinary. So we don’t expect that level of return to continue year on year.

Given the negative performance of global markets more broadly this year, the 2021/22 results across our portfolio show the resilience of our approach and the skills and experience of our investment team at navigating difficult market conditions.

It’s important to remember that even in retirement, many members have a long investment horizon. And you can be confident you’re with a fund that has delivered award winning, long-term performance**.

 

Market volatility: what you can do – and how we can help

For most members, the message is clear: market changes are generally temporary. Making decisions based on one year may not be the best way forward. HESTA Balanced Growth has been carefully designed to make the most of long-term investment performance and balance investment risk.

Before switching your investment options, it’s important to consider your investment timeframe and the potential impact of switching investments based on short-term market movements. We strongly encourage you to seek financial advice before making any change to your investment strategy.

Reacting to short-term market movements (for example, switching your investment options) can negatively impact the long-term performance of your super. It risks locking in losses from the temporary fall in the value of your investments and missing out on potentially higher returns when the market recovers. 

While markets can fluctuate over the short term, it’s the returns generated over the long term that really matter. Even after periods of extreme market volatility, like the Global Financial Crisis (GFC), or more recently in the COVID pandemic, long-term investment returns recovered well.

If you are retired or have a HESTA Income Stream account, you could think about preserving more of your capital using the government’s extended relief on minimum drawdown amounts for income streams. See this year's limits

 

have questions about your investments? we’re here for you.

We’re here to help you work through your investment strategies — and answer any other questions you might have. While we’re experiencing high call volumes, we’re working hard to respond as quickly as possible. Visit our Retirement Hub to make a time to chat with us. Our advisers are experts in helping members stay on top of their super investment strategy.

* Investments may go up or down. Past performance is not a reliable indicator of future performance. Returns are net of investment fees and costs, transaction costs and taxes.

** Product ratings are only factor to be taken into account when making a decisions about a financial product.

 

 

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