Superannuation fund HESTA has reported a ‘strong, competitive investment return’ to members for the 2018-19 financial year.
HESTA Chief Investment Officer Sonya Sawtell-Rickson said the Core Pool had exceeded its target investment objective of CPI plus 3.5 percent over ten years.
“Core Pool, our default MySuper investment option, delivered 7.25 percent this financial year, a fantastic result for our accumulation members’ super balances,” she said.
Over the medium to long-term Core Pool has delivered 8.32 percent over five years and 9.06 percent over ten years.
Ms Sawtell-Rickson said it was pleasing to see that Core Pool was also among the leading MySuper default options on a risk-adjusted basis as it showed how the fund was balancing the need to generate strong returns with protecting members’ capital.
An independent evaluation of the top performing MySuper investment options by rating agency Rainmaker found HESTA members were well-served by Core Pool.
It found that over three years Core Pool rated among the top ten MySuper investment options for performance on this risk-adjusted basis. Over the same time period, Core Pool was also ranked third for having the fewest negative returns.
“Core Pool is where most HESTA members have their super invested, so it’s important that we’re appropriately managing risk as well as achieving strong, competitive, long-term returns.” Ms Sawtell-Rickson said.
“The balanced, diversified approach of Core Pool aims to deliver long-term investment performance across a range of market conditions, while providing appropriate downside protection, as we believe that this will, over time, make the biggest difference to members’ retirement savings.”
Ms Sawtell-Rickson said Core Pool’s financial year return was driven by the strong returns performance of Australian Equities (11.4 percent) and other diversifying asset classes such as infrastructure and private equity.
The Fund’s socially responsible investment (SRI) option, Eco Pool, once again delivered outstanding returns to members, with industry leading long-term performance.
“Eco Pool is this year’s standout, achieving a return of 11.03 percent,” said Ms Sawtell-Rickson.
“This strong result is driven by the industry-leading responsible investment expertise we’ve developed over many years and underpins the strong, long-term relationships we’ve built with specialist managers as a result,” Ms Sawtell-Rickson said.
“These managers are skilled at delivering Eco Pool’s strategy that’s focused on identifying companies that are ‘best in class’ across both financial and environment, social and governance (ESG) factors.
Eco Pool was the first SRI superannuation option launched in Australia. Along with an investment strategy designed to identify top performing investments across both ESG and financial factors, the option also has fossil fuel, tobacco and uranium exclusions, along with a broader portfolio-wide exclusion on controversial weapons. Eco Pool has delivered double-digit returns in five of the past seven years.
HESTA is APHA’s Diamond Sponsor.