Best Balanced Super Funds: Best of the Best 2019
GOLD WINNER: HOSTPLUS
Hostplus's winning balanced super fund has been the No. 1 performer over one, three, five, seven and 15 years, according to SuperRatings' SR50 survey to June 30, 2018.
Hostplus favours actively managed investments and this fund holds around 90% in growth assets and 10% in defensive assets such as credit and diversified fixed income.
Over the past year, performance has been boosted by strong returns from its holdings in direct property (12% over the year to June 18), unlisted infrastructure (12%) and private equity (15%).
Hostplus also has a large holding of venture capital companies with innovative products. It has committed over $1 billion to Australian venture capital managers, supporting innovation in biomed, fintech, clean energy, autonomous cars and cybersecurity at the end of September 2018.
The asset allocation of the Hostplus balanced fund includes Australian equities (25%), international developed equities (20%), international emerging market equities (8%), direct property (13%), infrastructure (12%), private equity (6%), credit (8%), alternatives (6%) and diversified fixed interest (2%).
While Hostplus's portfolio weightings have remained fairly consistent over the past 10 years, it has tweaked the allocation to improve its defensive characteristics and flexibility. It reduced the balanced option's fixed interest allocation by 2% on the basis of its poor prospective yields and increased its exposure to alternatives.
It also cut back on Australian equities and upped its allocation to international equities by 2% as well as increasing exposure to private equity by 1% by reducing its investment in credit securities.
Hostplus fees for the balanced option are 1.06% as well as a weekly administration cost of $1.50, totalling $78 per year, unchanged since 2005. It is one of a few superannuation funds that charges a flat fee and does not charge an asset-based administration fee.
First Super, a $3 billion industry fund, comes second for its strong double-digit performance from asset classes such as infrastructure, private equity and property as well as standard asset classes such as Australian and global shares.