Mark England

Citi Services has announced it has won a mandate to provide custodial and fund services to superannuation fund Hostplus in a five-year contract extension.

Citi was the incumbent party in a competitive tender process. The retention of the mandate builds on Citi’s existing 13-year partnership with Hostplus.

Hostplus is one of the largest superannuation funds in Australia, with over 1.9 million members, more than 320,000 employers and over $150 billion in funds under management.

Over their 13-year partnership, Citi has worked closely with Hostplus as it has scaled and grown in complexity; supporting their increased investment requirements, regulatory obligations and operational efficiency.

The mandate retention follows a rigorous and competitive tender process. Citi was selected for its unmatched custodial and fund administration services that will support Hostplus in its mission to deliver outstanding investment outcomes to its members. 

Mark England, Co-Head of Services for Citi Australia and New Zealand, said “We are delighted to continue our relationship with Hostplus. We aspire to be the custodian and funds provider of choice for industry superannuation funds, and our success in this competitive tender process is a strong endorsement of our platform.

“As Australia’s A$4.5 trillion superannuation sector continues to grow and faces greater regulatory obligations and investment requirements, Citi is confident that our capabilities and integrated solutions are unmatched in the market. The combination of our platform, people and unparallelled global network positions us as the long-term provider of choice for industry super.” 

David Elia, CEO of Hostplus, said, “We are pleased Citi has been reappointed as Hostplus’ custodian following a competitive RFP process. The outcome reflects Citi’s cultural alignment with the fund, their depth of capability and the quality of solutions they bring to our custodial arrangements.

“Through the in‑depth process, we confirmed that Citi remains best placed to deliver custodial services that are critical to supporting our long‑term business and investment strategies, and we value their ongoing commitment to the fund and our members.”

Citi Services has an integrated suite of Custody, Funds, Liquidity Management Services, Payments, Trade and Working Capital Solutions. Through its advanced data capabilities, Citi connects and serves clients across the entire trade and investment ecosystem.

With a leading proprietary network, universal banking capabilities, and holistic offering across Services, Markets and Banking, Citi is well-equipped to power the global ambition of Australia’s superannuation sector.

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The Lonsec Manager of the Year was awarded to Perpetual Asset Management in recognition of its well-established investment philosophy and process, as well as a long standing and strong investment culture.

“Perpetual Asset Management has been committed to its investment style and maintained its approach through multiple investment cycles. It has also broadened its exposure across asset classes and built out its focus on ESG,” said Lonsec Research Executive Director, Lorraine Robinson.

Amanda Gillespie, Perpetual Asset Management Australia Group Executive, said “It’s a tremendous honour to be awarded both the Lonsec Fund Manager of the Year and the Lonsec Multi Asset Fund of the Year, being recognised for our true-to-label approach, broadened investment management capabilities and ESG credentials.”

In a new category introduced this year, the Lonsec Sustainable Fund of the Year was awarded to the Martin Currie Ethical Income Fund. ‘The Martin Currie fund excels at both ESG and Sustainability and has delivered consistent excess returns over the last few years so is a worthy winner of this award,’ continues Lorraine Robinson.

To celebrate the great innovation and development taking place within the industry, Lonsec also recognised the T. Rowe Price Global Impact Equity Fund with the Innovation Award. ‘T. Rowe Price is leading the way in mainstreaming ESG investment strategies and offers a glimpse into the next leg of evolution to dark green products.”

“It was wonderful to be able to celebrate in person this year. Congratulations to Perpetual Asset Management and all the other winners and nominees in this year’s awards.”

The SuperRatings Fund of the Year went to Hostplus, recognising the fund’s strong results across our key assessment areas.

“Each year we examine funds’ end to end offerings across MySuper, Member Choice and Pension offerings to choose the Fund of the Year. Hostplus was competitive across the key metrics of net benefit, member servicing and engagement, as well as providing a broad offering from low cost investing right through to a tailored retirement proposition,” said SuperRatings Executive Director, Kirby Rappell.

Hostplus also received the MyChoice Super of the Year Award for its continued uplift across digital services, whilst executing strategic initiatives to make it easier for advisers to engage with the fund.

David Elia, Hostplus Chief Executive Officer, said “We are honoured to be recognised and awarded SuperRatings’ 2023 Fund of the Year. At Hostplus our members’ best financial interests are at the core of our decision making and the net benefit we provide to them at retirement.”

SuperRatings also announced its MySuper of the Year Award, with CareSuper winning this category. CareSuper also received the Smooth Ride Award, reflecting its focus on risk management and strong outcomes on a risk-adjusted basis. “CareSuper continues to generate strong net benefit outcomes, while also providing a competitive default insurance offering and is a worthy recipient of the MySuper of the Year Award.” said Kirby Rappell

TelstraSuper was awarded Pension of the Year. “TelstraSuper was selected based on the strength of the tailoring within its retirement solution, focus on innovation and digital capabilities, coupled with its strong advice and support services,” said Kirby Rappell.

“It is an honour to continue to recognise the best in the superannuation sector and award those funds which, in the last year, have helped their members to navigate an increasingly volatile landscape.”

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Ned Bell

Bell Asset Management, a global equities boutique manager, today announced that it had been awarded $500 million global small and mid-cap equity mandate from industry super fund, Hostplus

Hostplus, CEO, David Elia commented: “We look forward to working with Bell Asset Management to manage a Global SMID strategy for Hostplus’ developed markets portfolio. Bell’s strong long-term performance record, the quality of the team and a disciplined investment approach were the key factors in our making them part of our growing and diversified portfolio. We expect this strategy to add resilience to Hostplus’ asset class structure in light of the increasing market uncertainty.”

Ned Bell, Chief Investment Officer of Bell Asset Management commented: “We are delighted to have been selected by Hostplus, after an extensive due diligence process. We’re looking forward to working with the Hostplus team to manage funds on their members’ behalf. We understand the importance of this decision and greatly appreciate the opportunity.”

Rob Sullivan, Managing Director, Strategy and Distribution, of Bell Asset Management said: “We are seeing increasing demand for this segment of the market as investors look for sources of alpha at lower levels of risk versus other growth options. We look forward to building a strong and long partnership with Hostplus and delivering the best results we possibly can for its members.”

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Leading research house SuperRatings has released the top performing funds within its SR50 Balanced Index which tracks performance of 50 options with exposure to growth assets of between 60 to 76%. Hostplus – Balanced was the top performing option for the 1-year period ending 30 June 2022, returning 1.6%.

David Elia Chief Executive Officer for Hostplus indicated the fund’s performance was “…a testament to Hostplus’s active investment approach, especially in navigating volatile markets.”

QANTAS Super’s balanced option came in second achieving a return of 0.6%, following its first-place result for the financial year to 30 June 2021.

QANTAS Super’s Chief Investment Officer Andrew Spence commented, “Our focus on diversification, risk management and investment governance help to deliver competitive returns despite the uncertainty in markets, as evidenced by our returns in FY 21/22 and FY 20/21.”

The table above also displays 10-year performance for these funds that have performed the best over the 1-year period, as super is ultimately a long-term investment and while it is interesting to compare performance over shorter-term periods, it is not the full story. This is particularly important to emphasise given the unprecedented levels of volatility we have seen since the beginning of the pandemic.

Hostplus was also the top performer over the long-term, with an average annual return of 9.7% over the last decade. Followed closely by AustralianSuper – Balanced with a return of 9.3% and Australian Retirement Trust – Super Savings with a return of 9.00%. Cbus – Growth (MySuper) delivered a close fourth ranking return of 8.96%.

AustralianSuper Chief Investment Officer Mark Delaney stated, “After more than 10 years of economic growth our outlook suggests a possible shift from economic expansion to slowdown in the coming years. In response, we have started to readjust to a more defensive strategy, as conditions become less supportive of growth asset classes such as shares.”

The Bumpiness Factor 

SuperRatings has for many years also looked at how bumpy or consistent a fund’s returns are over time. We have continued to focus on this amid the ongoing ups and downs we are seeing across Australian and global investment markets.

Kirby Rappell Executive Director of SuperRatings commented, “Since the bottom of the GFC we haven’t seen huge amounts of volatility coming through, there have been a few moments, but we have seen extreme levels of volatility since COVID-19 hit and in terms of the menu for the year ahead, we expect to see more volatility.”

The table below shows the top 10 funds ranked according to their volatility-adjusted return, which measures how much members are being rewarded for taking on the ups and downs.

Australian Retirement Trust – QSuper Accum. – Balanced sits at the top of the table below, which shows that the fund achieved a return of 6.1% p.a. over the past seven years. Catholic Super – Balanced Growth (MySuper) follows closely in terms of the ranking based on the ability to navigate the ups and downs of the market. While Mercy Super – MySuper Balanced a small-sized fund ranks third, punching above its weight and achieved a 7-year return of 6.8%.

Australian Retirement Trust’s Chief Investment Officer Ian Patrick commented, “Both Australian Retirement Trust portfolios incorporate dynamic asset allocation processes that see weights increased as expected forward returns increase. While the recent sell off in many markets clearly makes them cheaper, this is tempered by economic views, particularly given the uncertain outlook for inflation.”

Kirby Rappell commented, “While the 2022 financial year has seen super funds record a modest fall, the benefits of diversification have shone through. When we compare returns for equity, bond and listed property markets to balanced style portfolios among super funds, these results should be reassuring to members.”

Mr Rappell continued, “Superannuation is a long-term investment and patience remains key. For those Australians under 50, the recent market volatility is not expected to have any impact on their retirement. This year’s results are just one out of a 30 to 40 year investment for younger Australians.”

This result is more concerning for those nearing or in retirement, however, we often see these members sitting in investment options which are less exposed to these market movements which can lessen the impact. The sobering result for this year is likely to be those members invested in diversified fixed interest, with rising bond yields resulting in capital losses for members in an area often considered defensive.

As 30 June returns are now being finalised, funds will be focused on preparing member statements. Making sure you are putting aside some time to engage with your super statement will be time well spent. Checking the type of investment option you are in, and whether it suits the level of ups and downs you’re comfortable with, is worthwhile, with most funds offering a risk profiling tool on their websites to help members understand their own attitudes to risk. As well as seeing the calculators your fund offers, about 60% of super funds now offer an app, so if you have never checked your super before, now might be the time to get started.

Super has a lot to celebrate over the past 30 years. Since 1992, an estimated 7% per annum return means that $1 invested in 1992 is now estimated to be worth $7.67, depending on fees. While we will see ups and downs over time, super has performed strongly over the long term with 25 positive returns over the past 30 years.

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