our diversified approach

HESTA is committed to helping our members achieve strong, long-term investment outcomes. A key part of this commitment is our diversified investment approach. But what does diversification mean for you as a HESTA member?

what is diversification?

Put simply, diversification is about spreading investments across a range of different asset types, sectors, and markets.

By not putting all your eggs in one basket, we use diversification to help reduce overall risk for member investments. This means you may not get the highest absolute return in every given year, but our aim is to achieve a more stable long-term return. If one investment isn’t performing well, others can help offset the impact — helping preserve and grow your super over the long term.

While a lower single-year return can naturally create some short-term nervousness, it can be useful to remember your long-term goals and seek advice before making snap decisions.

So what does this look like at HESTA? Let’s look at one of the many layers of diversification that we consider.
 

growth versus defensive assets

You may already know that investment assets are commonly split into growth and defensive assets. The table below can help you see the differences:

Basically, if you’re relying only on growth assets, you should expect bigger ups and downs, but generally higher long-term average returns. Conversely, if you’re only holding defensive assets, you will likely see smaller ups and downs but lower long-term growth.

That’s why super fund options with a high proportion of more volatile growth assets, like listed equities, can look stellar during a bull market when shares are rising, but may fall when the markets turn.

Growth/defensive asset mix

Figure 1: Growth and defensive strategic asset mix for Balanced Growth and Conservative accumulation options. This mix may change.

To meet our members’ needs, HESTA Ready-Made options have different growth and defensive allocations to meet each option’s investment objective, as outlined in our super Investment Choices guide (PDF)* or Income Stream PDS (PDF)*. It’s also why it’s important to find the right option to meet your risk tolerance and goals.
 

asset class

Growth versus defensive is the simplest way to think about diversification. Asset classes (like listed shares, bonds, and property) are another way that we diversify.

That's because each asset class behaves in a different way. As one asset class rises another may fall. Carefully managing the relationship between various asset classes can produce a group or portfolio of investments with a lower risk for the targeted return. We also invest across a range of factors within these asset classes, such as industries and geographies.

Of course, the risk and return of an investment will also depend on geopolitics and market conditions (rising, steady, falling) when you invest.

Market conditions can cause assets to respond differently. For instance, as listed shares “draw down”, or lose value, due to a change in market confidence, bonds or unlisted assets values might change less and can help weather what is usually a temporary loss in listed share value.

As you can see from the example of HESTA’s MySuper Balanced Growth allocation targets^*, we spread out your investments across a broad variety of assets. Some of these usually rise or fall at the same time, like Australian and international shares, and some don’t, like infrastructure and debt.

HESTA’s diversified approach

As a profit-to-member fund, HESTA invests in and for people who make our world better, and diversification is one key pillar of preserving member value.

Our investment team models economic cycles across major markets, actively balances the levels of growth and defensive assets within long-term ranges, all while positioning for emerging growth opportunities and taking advantage of market volatility. But we know others have valuable perspectives too, so we work with trusted global partners to cultivate a diversity of thought and help deliver returns for our members.

Our diversified approach has been a hallmark of delivering investment excellence with impact^{^} and continues to support the strong long-term returns^# our members expect and rely on in retirement.

And remember, HESTA members can access financial advice to discuss their investment strategy and ensure it aligns with their personal circumstances and goals.

Discover more about how HESTA has guided our members and their investments through many major market challenges. Read Market changes and your super. 

^* As at 30 September 2025.

^{^} For more information on investment excellence with impact, visit hesta.com.au/about-us/super-with-impact/investment-excellence-with-impact

^# Past performance is not a reliable indicator of future performance.