HESTA High Growth: Driving Higher Returns

HESTA High Growth is designed for members who can tolerate higher risk in pursuit of superior long-term returns. With 80% of assets in growth investments and 20% in defensive assets, this option aims to maximize capital growth over a multi-decade horizon. We’ll explore its structure, past performance, fee profile, risk metrics, and target investors.

The High Growth option allocates 80% to growth assets—global and domestic equities, infrastructure, and property—and 20% to defensive assets like bonds and cash. This configuration seeks to capture market upside while retaining a small cushion for market downturns. The portfolio is rebalanced periodically to maintain the target weights.

Over the last 10 years, HESTA High Growth has averaged annual returns of approximately 8.3%. In bull markets such as 2017–2019, gains reached upwards of 16%, whereas drawdowns during the COVID-19 crash were around 28%. Recovery has generally taken under a year, demonstrating resilience despite higher volatility. Analyzing different market cycles illustrates the fund’s risk-return trade-off.

HESTA’s High Growth option carries a net investment fee of about 0.88% p.a., covering management and administration. Although higher than the Balanced option, this fee corresponds to the increased complexity and active management of growth assets. Investors should evaluate whether the additional fee is justified by potential performance gains relative to lower-cost alternatives.

With a substantial equity weighting, expected volatility is around 13–15% per year, and the probability of a negative return in any given year is roughly 45%. This heightened risk is suitable for members with long investment timeframes who can endure significant market fluctuations without needing to draw on their super immediately.

High Growth is ideal for members under 45 or those with more than a decade before retirement, comfortable with short-term volatility in exchange for long-term growth. Members nearing retirement or requiring stable income should consider more conservative options.

HESTA members can switch to High Growth via the member portal under ‘Investment menu’. SMSF or DIY investors can replicate this allocation using equity-focused ETFs and bond or cash instruments for the defensive portion. Ensure periodic rebalancing to stay aligned with target weights.

HESTA High Growth offers the potential for higher returns through a growth-heavy portfolio, balanced by a small defensive sleeve. While volatility is significant, disciplined investors with long horizons may find this option aligns with their retirement objectives. Always consider your personal risk tolerance and investment timeframe when making allocation decisions.