Looking for the right investment fund can be a daunting task. With the plethora of options available in the market, it’s natural to feel overwhelmed. However, if you’re someone who’s done some research, you’re likely to have come across Hesta. But the question is, is Hesta a good fund? Let’s find out.
Hesta is a superannuation fund that was established in 1987 to serve the healthcare sector. Over the years, it has grown to become one of the largest funds in Australia with around 870,000 members and over $50 billion in assets under management. The fund has earned a solid reputation and has won several awards for its investment performance and customer service. But despite all the accolades, it’s important to take a closer look and evaluate if Hesta is the right fit for you.
When it comes to investing, it’s always wise to do your homework before making a decision. With Hesta, there’s certainly a lot of positive buzz going around. Still, it’s important to look beyond the hype and consider factors like fees, investment options, and customer service. Ultimately, the decision to invest in Hesta or any other fund will depend on your financial goals, risk tolerance, and personal preferences. So, is Hesta a good fund? That’s for you to decide.
Hesta Company Profile
Hesta is an Australian superannuation fund that provides superannuation, insurance, and investment products to its members. The fund was established in 1987 and is the largest industry-specific super fund in Australia, catering mainly to workers in the healthcare sector. As of September 2021, Hesta has over 900,000 members and manages assets worth over AUD 65 billion.
- Hesta is a profit-to-member fund, meaning that any profits generated are returned to members in the form of lower fees, better returns, and improved services.
- The fund has consistently performed well over the years, delivering above-average returns for its members. Hesta’s Balanced Growth option has returned an average of 8.43% per annum over the past 10 years, outperforming the industry average of 7.47% per annum.
- Hesta has a strong focus on responsible investing and sustainability. The fund has committed to net-zero emissions by 2050, and all of its investment options integrate environmental, social, and governance (ESG) factors into the investment process.
Hesta’s Investment Options
Hesta offers a range of investment options to suit different risk profiles and investment objectives. These include:
- PreMixed options – These options invest in a mix of asset classes, including Australian and international shares, property, infrastructure, and fixed income. Options range from High Growth to Conservative.
- Asset class options – These options invest in a single asset class, such as Australian shares, international shares, or property. These options provide more targeted exposure to specific asset classes and may be suitable for investors with a specific investment outlook.
- Socially Responsible options – These options invest in companies that meet certain ethical and sustainable criteria, such as avoiding investments in companies that produce tobacco or nuclear weapons.
Hesta’s Insurance Options
Hesta offers a range of insurance options to protect its members and their families in the event of illness, injury, or death. These options include:
- Death and Total and Permanent Disablement (TPD) Insurance – This provides a lump sum benefit in the event of a member’s death or permanent disability
- Income Protection Insurance – This provides a replacement income if a member is unable to work due to illness or injury.
- Insurance for family members – Hesta offers insurance options for spouses, partners, and children of members.
Hesta’s Fees and Charges
Hesta’s fees and charges are competitive compared to other super funds in Australia. The fund charges an administration fee of $1.50 per week or 0.11% per annum of the account balance, whichever is greater. Investment fees vary depending on the investment option chosen but typically range from 0.12% to 0.91% per annum.
| Fee Type | Amount |
|---|---|
| Administration Fee | $1.50 per week or 0.11% per annum of the account balance, whichever is greater |
| Investment Fee | Varies depending on the investment option, typically ranges from 0.12% to 0.91% per annum |
| Insurance Fee | Varies depending on the insurance option chosen |
Overall, Hesta is a strong performer in the Australian superannuation industry, with a focus on responsible investing, competitive fees, and a range of investment and insurance options to suit different needs.
Hesta Investment Strategies
When investors consider putting their money in a fund, one of the most important factors they examine is the investment strategy. Hesta is known for employing different strategies to achieve its goal of generating high returns for its investors. The following are some of the Hesta investment strategies:
- Active management – Hesta’s investment philosophy is to actively manage their portfolios and make strategic moves based on market conditions. They believe that by being actively involved in the management of their funds, they can generate higher returns than passive investments.
- Sector rotation – Hesta may shift their portfolio’s weightings from one sector to another based on their assessment of the current market conditions. For example, if they anticipate a particular sector will underperform, they may sell some of the stocks in that sector and invest in another sector they believe will perform better.
- Bottom-up approach – When selecting stocks, Hesta’s approach is to look at the individual company fundamentals and financials first before considering the overall market. They will analyze a company’s balance sheet, income statement, cash flow statement, and other metrics before making investment decisions.
Hesta’s Track Record
Over the years, Hesta has garnered a reputation for delivering above-average returns to its investors. According to their website, their flagship fund, the Hesta Growth Fund, has returned an average of 8.9% per annum over the past 10 years. This is significantly higher than the average returns of other funds in the same category.
Hesta’s Risk Management Strategies
Alongside their investment strategies, Hesta also has a set of risk management strategies they utilize to protect their investors’ capital. The following are some of their risk management strategies:
| Strategy | Description |
|---|---|
| Hedging | Hesta may use derivatives to hedge against market risks. For example, they may use options to protect their portfolio against a market downturn. |
| Diversification | Hesta diversifies its portfolio by investing in stocks across different sectors to minimize risk. |
| Stop-loss orders | Hesta may use stop-loss orders to limit their losses on a particular stock. If the stock reaches a predetermined price, Hesta’s system will automatically sell the stock to limit their losses. |
By employing a combination of investment strategies and risk management strategies, Hesta has been able to generate above-average returns while managing the risks inherent to investing in the stock market. These strategies may not guarantee success, but they provide a roadmap for investors who want to put their money in a fund that is managed by an experienced team of professionals.
Hesta Past Performance
One of the most important aspects to consider when choosing a fund is its past performance. This provides an indication of how the fund has performed in the past and can help investors to make more informed decisions about whether or not to invest. When it comes to Hesta, the fund has a strong track record of performance over the past few years.
- In 2020, Hesta’s Balanced Growth option delivered a return of 5.81%.
- The High Growth option delivered a return of 7.74%, and the Conservative Growth option delivered a return of 4.64%.
- Over the past 10 years, the Balanced Growth option has delivered an average annual return of 8.29%.
These returns are impressive and suggest that Hesta is a strong fund that has performed well over the long-term. Of course, past performance is not a guarantee of future returns, but it does provide a good indication of whether or not a fund is likely to perform well in the future.
In addition to its strong overall returns, Hesta has also outperformed its benchmark in many cases. For example, in 2020 the Balanced Growth option outperformed its benchmark by 1.97%. This suggests that Hesta is able to provide strong returns while also managing risk effectively.
| Year | Balanced Growth Return (%) | Benchmark Return (%) | Outperformance (%) |
|---|---|---|---|
| 2020 | 5.81 | 3.84 | 1.97 |
| 2019 | 14.67 | 13.22 | 1.45 |
| 2018 | -1.18 | -2.99 | 1.81 |
Overall, Hesta’s past performance suggests that it is a strong fund that has been able to provide solid returns for its investors. While past performance is not a guarantee of future returns, it does provide a good indication of how a fund is likely to perform over the long-term.
Hesta fees and charges
When considering investing in a fund, it’s crucial to understand the fees and charges associated with it. Hesta is a well-known Australian industry super fund that aims to provide a range of affordable investment options to its members. Let’s take a closer look at the fees and charges associated with Hesta.
- Administration fees: Hesta charges an annual administration fee that ranges from $1.25 to $2.25 per week, depending on the investment option you choose. It’s important to note that this fee is deducted from your account balance.
- Investment fees: Hesta charges fees for managing your investment, which range from 0.08% to 0.78% per year, depending on the investment option you choose. These fees are deducted from the investment returns.
- Switching fees: If you decide to change your investment option, Hesta charges a switching fee of $20 per switch. It’s important to consider this fee before making any changes to your investment strategy.
It’s essential to note that the fees and charges associated with Hesta may change over time. It’s important to check the Hesta website or speak to a financial adviser to obtain up-to-date information on fees and charges.
Overall, Hesta’s fees and charges are relatively low compared to other super funds in Australia. However, it’s crucial to consider all aspects of a fund before making any investment decisions. Always do your research and speak to a financial adviser before investing.
Conclusion
Hesta is a popular Australian super fund that offers a range of investment options to its members. It’s important to understand the fees and charges associated with any investment before making a decision. Hesta’s fees are relatively low compared to other funds, but it’s crucial to consider all aspects of the fund, including performance and investment options, before making any investment decisions.
| Fees | Amount |
|---|---|
| Administration fees | $1.25 to $2.25 per week, depending on investment option |
| Investment fees | 0.08% to 0.78% per year, depending on investment option |
| Switching fees | $20 per switch |
Before making any investment decisions, it’s essential to speak to a financial adviser and do your research to ensure you make informed decisions.
Hesta Customer Service
When it comes to investing your hard-earned money, it’s natural to have some concerns. That’s why having a responsive and helpful customer service team can make all the difference. Hesta prides itself on having a strong customer service focus and boasts several channels for customers to get in touch with them:
- Phone: Hesta offers a dedicated call center for its members. If you have any questions about your account or investment options, you can call them on 1800 813 327. The line is open weekdays from 8 am until 8 pm (AEST).
- Email: If you prefer to communicate via email, you can send your questions or concerns to [email protected]. Hesta pledges they will get back to you within 2 business days.
- Live Chat: Hesta offers a live chat service on its website. This option is especially helpful if you need immediate assistance but don’t want to make a phone call.
Not only is Hesta’s customer service team easily accessible, but they are also knowledgeable and responsive. In fact, Hesta has won several awards for customer service excellence:
| Award | Year |
|---|---|
| Best Fund for Insurance | 2020 |
| Best Fund for Promoting Member Engagement | 2019 |
| Member Services Fund of the Year | 2018 |
These awards are a testament to Hesta’s commitment to providing excellent customer service. Whether you’re a seasoned investor or just starting, having a helpful customer service team can give you peace of mind that your money is in good hands.
Hesta Investment Options
When it comes to investing, there are several options available for those looking to put their money to work. Hesta offers a range of investment options to suit different needs and objectives. Here are some of the investment options available through Hesta:
- Growth investment option
- Balanced investment option
- Conservative investment option
- Cash investment option
- Socially responsible investment option
- SharesPlus investment option
The Growth investment option is designed for members who are willing to take on more risk in exchange for potentially higher returns over the long term. This option invests primarily in Australian and international shares and has a higher exposure to growth assets, such as equities and property.
The Balanced investment option aims to provide a balance between growth and defensive assets. This option invests in a mix of Australian and international shares, fixed interest, and property securities. It is designed for investors who are looking for a balance of risk and return.
The Conservative investment option is designed for members who prefer a more defensive investment strategy. This option invests primarily in fixed interest and cash, with some exposure to shares and property securities. It is suitable for members who want to minimise the risk of capital loss and have a lower tolerance for risk.
The Cash investment option is designed for investors who want a stable investment option with minimal risk. This option invests primarily in cash and other short-term deposits and has a low exposure to growth assets, such as shares and property. It is suitable for investors who are risk-averse and want to preserve their capital.
The Socially Responsible investment option allows investors to invest in companies that meet certain environmental, social, and governance criteria. This option aims to promote sustainable and responsible investment practices and is suitable for investors who want to make a positive impact with their investments.
| Investment Option | Australian Shares | International Shares | Fixed Interest | Property Securities |
|---|---|---|---|---|
| Growth | 65%-80% | 20%-35% | 0%-15% | 0%-10% |
| Balanced | 45%-60% | 20%-35% | 20%-35% | 0%-10% |
| Conservative | 20%-35% | 5%-20% | 60%-75% | 0%-10% |
| Cash | 0% | 0% | 100% | 0% |
| Socially Responsible | 45%-60% | 20%-35% | 20%-35% | 0%-10% |
| SharesPlus | 100% | 0% | 0% | 0% |
The SharesPlus investment option is unique in that it invests 100% of the member’s balance in the Hesta Australian Shares Fund. This option is designed for members who want exposure to Australian shares and are comfortable with a high degree of volatility.
Overall, Hesta offers a range of investment options to suit different needs and objectives. It is important to consider your risk tolerance, investment goals, and time horizon when selecting an investment option.
Hesta Ethical Investment Approach
Hesta is an industry super fund established in 1987 for the health and community services industry. Hesta ethical investment approach is one of the strongest reasons why people invest in the fund.
- Investment in Sustainable Companies: Hesta invests in companies that are sustainable and have high environmental, social and governance (ESG) standards. This ensures that the companies Hesta invests in are not only profitable but also have a positive impact on society and the environment.
- Exclusion Criteria: Hesta has a strict exclusion criterion which means the fund does not invest in companies involved in activities that could harm society or the environment. These companies include gambling, tobacco, and weapons manufacturers.
- Active Ownership: Hesta actively engages with companies to improve their environmental, social and governance practices. This engagement involves working with companies and using its ownership rights to influence the direction of companies to align with the values of the fund’s investors.
The Hesta ethical investment approach offers investors an opportunity to make a positive impact on society and the environment while investing in profitable companies. Hesta does not compromise on returns, and its ethical investment approach has proven to be successful.
At the end of June 2021, Hesta’s Balanced Growth option has returned 9.35% p.a. over the past five years, outpacing its benchmark return by over 1% p.a. This demonstrates that ethical investments can be profitable.
| What Hesta invests in: | What Hesta avoids: |
|---|---|
| Renewable energy | Tobacco |
| Healthcare | Weapons manufacturers |
| Technology | Gambling |
In conclusion, Hesta’s ethics-driven approach to investing is a compelling reason to invest in the fund. Through its investment criteria, Hesta is creating a positive impact on society and the environment, and its successful returns demonstrate that ethical investments can also be profitable.
Is HESTA a Good Fund?
1. What is HESTA?
HESTA (Health Employees Superannuation Trust Australia) is a superannuation fund designed especially for healthcare professionals.
2. How has HESTA performed in the past?
In the past, HESTA has performed well. Over the last 10 years, the HESTA Balanced option has consistently outperformed the median fund.
3. What kind of investments does HESTA offer?
HESTA offers a range of investments across different asset classes, including Australian shares, international shares, property, and fixed interest.
4. What fees does HESTA charge?
HESTA charges fees for administration, investment management, and advice. The exact fees depend on the type of account and investment option selected.
5. Does HESTA offer insurance?
Yes, HESTA offers a range of insurance options, including income protection, total and permanent disability, and death cover.
6. Can anyone join HESTA?
No, HESTA is only available to healthcare professionals and their spouses.
Closing Thoughts
Thanks for taking the time to learn more about HESTA! If you’re a healthcare professional or spouse looking for a superannuation fund that caters to your unique needs, HESTA might be a good option to consider. Remember to do your own research and consult with a financial advisor before making any investment decisions. We’ll see you again soon!