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Important updates from Hostplus

Hostplus believes everyone has the right to understand their super. That’s why we’ve put together this summary to help you to better understand some of the recent changes we’ve made as a fund.

Changes like:

Earlier this year, we were awarded the Chant West Integrity Award for our high-quality investment, insurance and financial advice as well as our ongoing commitment to disclosure. And while we we’re proud to be independently recognised for our practices, we’ll keep striving to make super accessible and easy to understand for everyone.

New Federal Government guidelines mean super funds will now report all underlying costs associated with their investments. This means more costs – particularly in unlisted assets like property and infrastructure - think Sydney’s International Convention Centre, Melbourne’s Southern Cross Station – will be reported. It’s important to note these costs are not new and have always been a part of the investment processes. The difference is that these expenses will now be directly stated as part of the investment fee and indirect cost ratios (ICRs) of a particular investment option.

This means your total investment costs may appear to have increased slightly. This isn’t actually the case. These costs have always been there, they just haven’t been shown this way before. Rest assured, the more detailed disclosure of fees and indirect costs won’t impact the amount you retire with. We’ll continue to do everything we can to deliver the same industry-leading returns, after fees and after tax. In the end it’s the ‘net benefit’, or money-earned for fees-and-taxes-paid that really matters. For every $1 paid in fees by members in our default Balanced option for the 5 years to 30 June 2017, an amazing $11.30 was returned to accounts. This is almost double the $5.70 achieved by the average master trusts and retails funds over the same time period^.  Your half-yearly statements will provide a full breakdown of returns, fees, ICRs and taxes.

Hostplus investment management fee breakdown - Balanced option

We believe high-quality investments deliver high-quality returns and history tells us our strong performance is largely attributed to our long-term investment in unlisted assets like we mentioned earlier.

Unlike the stock exchange, infrastructure and unlisted property have underlying costs like stamp duty, council rates, facilities management and utility bills, making them more expensive to invest in. Even with these costs their tendency to deliver stable long-term returns and ability to balance our portfolio –  particularly when the stock market takes a negative turn – makes them extremely valuable investments.

Another key contributor to our performance is active management. Unlike passive management which typically aims to achieve the average asset class performance (otherwise known as the index), active management relies on external managers to effectively ‘beat’ the index.

Each year we take a close look at the mix of investments managed within our available investment options and make adjustments to optimise the asset allocation. So, for example, our popular low-cost Indexed Balanced Option now invests a little more in the international market and a little less in Australian shares while maintaining the same levels of cash and diversified fixed interest investment as before. You can see the full range of adjustments made to our asset allocation in the table below.

 

Balanced Capital Stable Conservative Balanced Indexed Balanced Shares Plus
Asset Class Before After Before After Before After Before After Before After
Australian shares

27.5%

25%

10%

10%

17%

18%

37.5%

35%

36%

34%

International shares – Developed markets

20.5%

20%

7.5%

7.5%

14%

14%

37.5%

40%

27%

27%

International shares – Emerging markets

7%

8%

2.5%

2.5%

5%

6%

-

-

9%

11%

Direct Property

15%

13%

12%

10%

13%

10%

-

-

8%

8%

Infrastructure

10%

12%

5%

7%

5%

8%

-

-

6%

6%

Private equity

5%

6%

-

-

2%

2%

-

-

6%

6%

Credit

8%

8%

10%

10%

6%

6%

-

-

6%

6%

Alternatives

5%

6%

8%

8%

6%

6%

-

-

2%

2%

Diversified fixed interest

2%

2%

20%

20%

15%

15%

15%

15%

-

-

Cash

-

-

25%

25%

15%

15%

10%

10%

-

-

While most of our members prefer to leave the investment decisions up to us, we know around 10 per cent like to get hands-on. That’s why we offer a range of options across a variety of assets and risk profiles.

If you prefer low-cost investment choices, you might be interested in our two new options both with extremely low management costs. The International Shares – Indexed and International Shares (Hedged) – Indexed options are available now to super and pension members. Both options can be selected as part of your existing suite of choices so you can tailor your mix to suit your needs.

Login to your Member Online or Pension Online to review your investment choices today.

We recently took another step to improve transparency, switching from weekly crediting rates to Daily Unit Pricing. Unit prices reflect changes in the value of the assets of each investment option, shifting with the market. When more funds are added to your account, more units are allocated, if funds are withdrawn, unit numbers reduce. Daily Unit Pricing allows for account value updates in close-to real time and represents an important step forward for Hostplus and our commitment to improving your retirement journey.

Daily Unit Pricing also means investment options can be switched from day-to-day rather than week-to-week, creating greater flexibility across our full range of super and pension products.

Want more?


If you’ve got questions about any of these changes or would like to discuss your retirement goals in more detail why not speak to a Financial Planner or call our team on 1300 467 875 Monday to Friday, 8am to 8pm AEST.


Issued by Host-Plus Pty. Limited ABN 79 008 634 704, AFSL No. 244392, as trustee for the Hostplus Superannuation Fund ABN 68 657 495 890, MySuper No. 68657495890198.

This information is of a general nature. It does not take into account your objectives, financial situation or specific needs so you should look at your own financial position and requirements before making a decision. You may wish to consult an adviser when doing this. Before making a decision about Hostplus products you should read the relevant product disclosure statement (call 1800 813 327 or visit hostplus.com.au for a copy). Past performance is not a reliable indicator of future performance.

^Number one Balanced Fund over 1 year (13.2%), 3 years (9.68%p.a.), 5 years (11.76%p.a.), and 7 years (9.92%p.a.) - SuperRatings Fund Crediting Rate Survey, 2nd August 2017.
^Source: SuperRatings Pty Ltd. Effective date of fund returns and fee structures 30 June 2017. Assumptions: $50,000 starting account balance, $50,000 salary, 3.5% p.a. salary increase, 9.5% SG contribution, 15% contribution tax, annual inflation rate 2.5%
*Assuming starting balance of $20,000 and $100,000 respectively and an investment return of 13.2% vs the average return of 10.4%. Illustrative figures only not inclusive of any other fees, charges or associated costs source: superratings.com.au/media/mediarelease/190717

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