HESTA had many high-performing investments in 2021. But our top performing category was private equity, which delivered fantastic financial outcomes for our members. Investment in private equity gives our members access to some of the most innovative companies in the early stage of their business life.
One of our focus areas within private equity is innovation, and this has produced some of our most successful investment outcomes. We have venture capital partnerships which invest in some of the most ambitious start-ups in Australia and New Zealand. Through these partnerships, our members are invested in companies developing breakthrough technology, such as bioprinting 3D cells, rocket science technology, and life-changing biomedical research and therapies.
It is specialised investment opportunities such as these which are helping drive really strong returns and are growing our members’ superannuation.
Title: HESTA Investment Update - February 2022
Hello and welcome to the HESTA Investment Update.
My name is Michael Sommers and I’m the General Manager of the Portfolio Construction & Risk team.
In some exciting news, HESTA continues to be recognised as one of the best performing super funds in Australia. We’ve just been awarded the SuperRatings Net Benefit Award - which recognises HESTA as the super fund with the best performance outcomes after fees and taxes.
On top of that, we were also awarded the SuperRatings’ 15-year Platinum Performance, which is their highest rating possible over 15 years.
This is a terrific result, and it rewards our members for their ongoing commitment.
Let’s now take a look at the recent returns for the HESTA Balanced Growth option as of 31 December 2021. Balance Growth returned 14.54% over the past 12 months. And it has now averaged 9.69%p.a. over the past 10 years. This demonstrates that across both the near and long-term, we’ve been able to deliver strong outcomes for our members.
These great results have been on the back of some exciting investment success stories over the past 12 months. Our investments in Private Equity are one example, and in fact it was our best performing asset class in 2021.
Our private equity investments offer our members access to some of the most innovative companies in the early stage of their business life. We access these opportunities by investing with venture capital firms, who are partnering with the most promising start-ups in Australia and New Zealand. These include companies working in biomedical research and therapy, and even rocket technology.
Across 2021, the HESTA Private Equity portfolio returned more than double listed market benchmarks. It is specialised investment opportunities such as these which have helped drive really strong returns and grow our members’ superannuation.
Turning our attention globally, we saw financial markets move in a positive direction across the December quarter. However, we’ve seen a number of factors generate some volatility. The spread of the Omicron variant has created some uncertainty. But fortunately, as health data emerged that symptoms were milder, concerns of a COVID resurgence were eased and markets began to recover.
Another big topic at the moment is inflation and forecasted interest rate hikes for 2022. Investors are trying to determine what effect this will have on investment growth going forward. This topic has been particularly important to my team in Portfolio Construction & Risk, as we have to consider the extent to which economic conditions will change over the coming years. Over the next 12 months, we expect to see an accelerated pullback in economic stimulus, as well as an increase in interest rates, which will help moderate inflationary pressure.
As we look ahead into 2022, the economic landscape will likely be different from what we’ve experienced over the past few years. So, we must be prepared for new opportunities and risks to emerge in financial markets. It’s important for our members to keep in mind that superannuation is a lifetime strategy, and the best investment outcomes will be seen over the long term.
Thanks for tuning in. We look forward to seeing you next time.
HESTA continues to reward our members commitment by being one of the top performers in the country. HESTA has just received the SuperRatings Net Benefit award 2022 – which recognises HESTA as the super fund with the best net benefit outcomes delivered to members. The net benefit is your investment earnings, after any fees and taxes have been taken out – in the long run, it’s the net benefit that really matters.*
HESTA was also awarded the SuperRatings’ 15-year platinum performance rating – the highest rating possible over 15 years.*
Pleasingly, alongside these awards, the HESTA Sustainable Growth option has been ranked as the best performing balanced investment option and sustainable investment option over 5 years to 31 December 2021, according to SuperRatings. Over this time period, HESTA Sustainable Growth has achieved an average of 11.66% p.a.
Here are the returns for the HESTA Balanced Growth option as of 31 December 2021.
Investments may go up or down. Past performance is not a reliable indicator of future performance. The returns shown are net of investment fees, indirect costs and taxes.
* Visit SuperRatings for important information about this rating. Product ratings are only one factor to be considered when making a decision.
** Balanced Growth is the default option for HESTA Super, while a blend of Balanced Growth and Conservative is the default strategy for the HESTA Income Stream.
Overall, financial markets moved higher to finish 2021. However, there were a number of factors that generated volatility, and we have continued to see elevated volatility to begin the new year.
As news of the Omicron variant emerged, markets were understandably cautious. However, as health data emerged that symptoms were milder, concerns of a COVID resurgence were alleviated and markets began to recover.
Inflation is another factor driving volatility in financial markets. As inflation increases, it drives up the cost of living and reduces peoples’ purchasing power. To balance the effects of inflation and ensure prices remain stable, we expect to see a pullback of stimulus and the rising of interest rates in 2022. These are commonly-used measures to moderate inflation.
As we know, financial markets began to retreat throughout January. However, it’s important to remember that pockets of volatility like this are not uncommon. At HESTA, our focus is on long-term investment performance.