investment update

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In our latest Investment Update, we give you a 20231 performance recap, market and HESTA news, and introduce a climate and health investment.

 

 

investment excellence


All Super and Income Stream Ready-Made options have delivered strong returns over the 12 months to 31 December 2023. And importantly, these options have all achieved returns above their long-term 10-year objectives to 31 December 20232.


Super and Transition to Retirement


For Super and Transition to Retirement (TTR) members, our Balanced Growth option returned 10.46% over the 12 months to 31 December 20233, achieving top 10 performance for 2023 from SuperRatings4.


Balanced Growth option (MySuper) returns to 31 December 2023


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.


You can view all our returns on our Super performance page or Transition to Retirement performance page.


Retirement Income Stream


For Retirement Income Stream (RIS) members, our Balanced Growth option returned 12.24% over the 12 months to 31 December 2023, and our Conservative option returned 8.21% over the same period5.


Retirement Income Stream Balanced Growth option returns to 31 December 2023

 

Retirement Income Stream Conservative option returns to 31 December 2023

 

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.

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.

 

You can view all our returns on our Income Stream performance page.

 


Australian Financial Review (AFR) CIO survey


Our Chief Investment Officer (CIO) Sonya Sawtell-Rickson once again participated in the AFR’s Annual Super CIO Survey. In the article, Sonya highlighted how HESTA retains a cautious stance and is proactively managing your savings in uncertain markets. We have further increased agility through cash holdings and internalisation to help capitalise on good buying opportunities and drive higher long-term value to our members.


market news


2023 was an eventful year, and generally surprised on the upside.

The RBA raised rates to 4.35% in November after a 4-month pause on increases, continuing one of the most aggressive interest rate hikes in recent history. We expect the ongoing higher-interest environment to further impact the real economy and consumer demand in 2024, and remain cautious in the year ahead.

After a year of significant losses in 2022, some stock markets bounced back in 2023. Tech stocks helped the NASDAQ see an annual gain of 44.7% for the year, while the ASX200 added 7% in December to close 2023 with an annual gain of 12%.

Elsewhere, Chinese growth stuttered and property markets remain a key concern. The war in Ukraine continued, and conflict emerged in the Middle East. More recently, global shipping disruptions in the Red Sea are emerging. Europe ended 2023 in recession. Despite this, the global economy was broadly more resilient than expected.

Despite rising policy rates in the first half of the year, expectations for central bank easing in 2024 saw global government bonds (developed markets) returning 6.9% for the year, and global credit returning 8.7% over the whole year, overcoming concerns of rising default rates.

 

super with impactTM


HESTA collaborates on antimicrobial resistance (AMR) awareness


From left to right: Akaash Sachdeva, HESTA RI Manager; Kylie Hewson, Deputy Mission Lead, Animal Health & the Environment, CSIRO; Moana Nottage, ESG and Sustainability Analyst, Alphinity Investment Management.


In late November, HESTA co-hosted an expert panel addressing antimicrobial resistance (AMR). AMR is seen when bacteria and viruses change over time and no longer respond to medicines. We have identified AMR as a systemic risk that has the potential to influence the market fundamentals that drive member investment returns, including economic growth.

The panel explored the global attention surrounding AMR, the current state-of-play in the Australian market, and the ways effective engagement with companies can encourage better practices and mitigate AMR risks.

At HESTA, we believe in the power of collective action for tackling systemic issues that have the potential to impact our members’ retirement. Collaboration often enables us to amplify our voice and drive action while using our resources efficiently.


HESTA scores top marks in Principles for Responsible Investment’s (PRI) 2023 Reporting

 

Image of PRI logo

 

Results for the 2023 PRI Reporting assessment were released in January. HESTA scored an impressive overall average of 95% and outperformed the PRI median in the process.

Global signatories to the United Nation-supported PRI are required to publicly report on their responsible investment activities and are assessed on their progress.

These results help strengthen HESTA’s standing as a responsible investment leader, and provide you assurance that we are using our expertise and influence to deliver strong long-term returns while accelerating our contribution to a more sustainable world.


HESTA wins SuperRatings and RIAA Awards

We’re incredibly honoured to have received some recent awards.

SuperRatings, the superannuation ratings agency, has again awarded our Industry and Personal Super plans with 20-Year Platinum Performance ratings for delivering superior value to our members. SuperRatings also awarded us MySuper of the Year 2024 as well as its Net Benefit award 2024 for the best net benefit outcomes delivered to members over the short and long term6.

As a fund that exists for its members, we are thrilled to be recognised for the continued value we strive to provide to you.



We are also pleased to have once again been recently named a Responsible Investment Leader by Responsible Investment Association Australasia (RIAA) for 2023. HESTA takes great pride in being a gutsy advocate for our members’ values while delivering value to members.


RIAA logo


You can find out more on our website.
 

Finally, we are delighted to share a new investment that’s helping us to deliver on our vision for Super with impactTM

Zenobe

Image of bus

 

HESTA recently co-invested into Zenobe, a leading battery leasing and storage provider based in the UK that is expanding in the US and Australia. As the top company in the UK and ANZ for bus electrification and a strong operator in battery storage and network infrastructure, Zenobe can play a major role in decarbonising transportation and the grid. Zenobe’s strengths include its unique end-to-end solution, long-term contracted revenues, and its focus on minimising customers’ lifetime costs in operating the buses. Zenobe’s growth opportunities across the US and ANZ position it for attractive returns.

Australia’s transport sector makes up 19% of our carbon emissions (as of 20227), so reducing those emissions will be important to meeting net zero targets. Moreover, vehicle pollution contributes to a vast number of Australian hospitalisations and premature deaths, with a University of Melbourne study estimating it as likely having a greater impact than car crashes8. In addition to addressing several sustainable development goals (SDGs)s, we believe addressing the effects of pollution is important to reduce its burden on the health system.

 

SDG 03 icon SDG 07 icon SDG 11 icon SDG 13 icon


Taking a long-horizon vision for decarbonisation allows us to move on opportunities like Zenobe that can generate competitive returns for members alongside health benefits to all Australians.

For more information on Zenobe’s work in Australia, please visit the Zenobe website.

 

1 All years mentioned refer to calendar year unless otherwise stated.

2 Except Indexed Balanced Growth, which only commenced on 1 October 2020 and has returned 8.66% average annualised return since inception. 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.

3 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.

4 Source: SuperRatings Fund Crediting Rate Survey (December 2023) – SR50 Balanced (60 – 76) Index.

5 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.

6 The rating is issued by SuperRatings Pty Ltd ABN 95 100 192 283 AFSL 311880 (SuperRatings). Ratings are general advice only and have been prepared without taking account of your objectives, financial situation or needs. Consider your personal circumstances, read the product disclosure statement and seek independent financial advice before investing. The rating is not a recommendation to purchase, sell or hold any product. Past performance information is not indicative of future performance. Ratings are subject to change without notice and SuperRatings assumes no obligation to update. SuperRatings use proprietary criteria to determine awards and ratings and may receive a fee for the use of its ratings and awards. Visit superratings.com.au for ratings information. © 2023 SuperRatings. All rights reserved.

https://www.dcceew.gov.au/energy/transport#:~:text=In%202022%20our%20transport%20sector,10%25%20of%20Australia's%20total%20emissions

https://www.unimelb.edu.au/newsroom/news/2023/february/vehicle-emissions-may-cause-over-11,000-deaths-a-year,-research-shows

 

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