Hostplus has delivered an industry-leading return of 12.18% for members in its Indexed Balanced option for the 2023/24 financial year.
“Our Indexed Balanced option has once again delivered highly favourable returns for our members invested in that option,” Chief Executive Officer David Elia said.
“Other options with a similar growth-oriented asset mix, including our Shares Plus option, also performed very well in the 2024 financial year to deliver above target returns.”
The Indexed Balanced Pension and Transition to Retirement (TTR) options similarly delivered favourable returns at 13.47% and 12.09% respectively over the year to 30 June 2024.
“One of the benefits of our extensive range of investment options is that it enables our members to have more choice when it comes to how they manage and seek to grow their retirement savings,” Mr Elia said.
“The number of members choosing to invest in our indexed and growth options has increased year on year, demonstrating the strength of our offering”.
Hostplus Chief Investment Officer Sam Sicilia said the results reflected the exceptional performance of global and domestic equity markets over the year to 30 June 2024.
“The double digit returns on these options have been driven by their higher exposure to International and Australian equities, including high performing technology stocks, which saw significant growth over the financial year,” he said.
While this year has been particularly strong for passive indexed investments, reflecting trends seen across the sector, Hostplus' active investment options continue to demonstrate strong long-term risk-adjusted returns.
The fund’s MySuper Balanced Option returned 7.60% for the financial year, 8.33% per annum over 10 years, and 7.88% per annum over 20 years to June 30, 2024.
Mr Elia said while challenging economic conditions had been persistent over the past 12 months, the continued strong long-term performance of the Balanced option was pleasing and demonstrated the effectiveness of the fund’s investment strategy.
“Saving for retirement is a marathon, not a sprint, which is why we are focused on seeking to deliver sustained performance over those longer investment horizons,” Mr Elia said.
“Our active management approach is designed to optimise our potential to outperform the market over the long-term, helping to maximise the retirement savings of our members.
“This is evidenced by the consistent outperformance of our actively managed investment options against our passive indexed options over the long term,” he said.
Mr Sicilia said the fund’s Balanced option had taken a more defensive position to listed markets and aimed to temper some of the impacts of market fluctuations through its highly diversified portfolio.
“We never invest for just one year – we consider the prevailing market conditions and leverage the attributes of the fund, namely our younger demographic, to invest with the aim of maximising return potential over the long term,” he said.
“Higher exposure to defensive assets has helped mitigate the impact of inflationary and uncertain market conditions over the past 12 months.
“Some asset classes, such as infrastructure and private credit, performed reasonably well in these conditions, which helped to balance out other sectors where growth was flat or lower than expected.”
The FY23/24 returns exceed the fund’s investment return target for the Balanced option of CPI plus 3% per annum over 10 years and CPI plus 4% per annum over 20 years.
The Hostplus Balanced Pension Option also brought solid results for retired members, with a return of 8.35% for the year ending 30 June 2024.
A complete list of FY23/24 investment returns is available here.