investment update - February 2026

In this investment update, we give you a 2025 performance and market recap, plus a deep dive into diversification.

performance

All Super and Income Stream Ready-Made options have delivered strong returns over the 12 months to 31 December 2025. And importantly, these options have all achieved returns above their long-term 10-year objectives to 31 December 2025¹.

Super and Transition to Retirement (TTR)

For Super and Transition to Retirement (TTR) members, our Balanced Growth option returned 9.42% over the 12 months to 31 December 2025².

Balanced Growth option for accumulation and TTR returns to 31 December 2025
 

You can view our Accumulation and TTR our returns on our Super performance page or Transition to Retirement performance page.

¹ Except Indexed Balanced Growth, which only commenced on 1 October 2020 and has returned 8.90% average annualised return from inception to 31 December 2025.

² 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.

Retirement Income Stream

For Retirement Income Stream (RIS) members, our Balanced Growth option returned 11.25% over the 12 months to 31 December 2023, and our Conservative option returned 7.53% over the same period³.
 

Retirement Income Stream Balanced Growth option returns to 31 December 2025
 

Retirement Income Stream Conservative option returns to 31 December 2025
 

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 our Income Stream returns on our Income Stream performance page.

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.

market news

Bringing you the top five market themes to recap the 2025 calendar year:

• US equity markets defied uncertainty to perform strongly, with the S&P 500 gaining nearly 18% in 2025, driven by the performance of IT, communications and industrials stocks.
• While the Australian economy showed resilience, leading the ASX300 to return 10.7%, it lagged globally compared to the US and many Asian markets that benefitted from larger technology sectors. While investors anticipated an RBA rate cut throughout 2025, stubborn inflation flipped expectations towards a hike in 2026. Still, unemployment dropped to 3.9% to reinforce signs of a strong economy.
• Bond yields varied across markets, with Australian 10-year yields rising 0.26%. US 10-year yields benefited from Federal Reserve easing and a supportive economy, rallying to their best performance since 2020. Geopolitical tensions are contributing to a cautious outlook for 2026.
• Property and infrastructure saw continued improved performance through the year, while Private Equity delivered double-digit returns driven by technology investments, but still underperformed the outsized listed market returns over the year.
• Commodities and a hawkish RBA gave the Australian dollar a tailwind, adding 8% and closing the year at 0.667 USD.

making sense of markets

Managing investments at HESTA involves discussing investment ideas with trusted global partners to understand where markets are headed, including in public forums like the Markets Happy Hour podcast.

Last quarter, our General Manager for Dynamic Asset Allocation, Michael Blayney, sat down with them to chat about AI, central bank rates, and alternative investments.

To hear more about some of the things we consider when we manage investments at HESTA, listen to the Markets Happy Hour episode here.

our diversified approach

HESTA has long highlighted the work we do to broadly diversify your investments. But what does that really mean?

In simple terms, diversification in investments helps reduce risk over the long term to spread out your investments, so that any effect on one asset, has a smaller effect on the whole portfolio.

So what does this look like in practice?
Read more about our diversified approach.