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Australian Retirement Trust vs HESTA: Which super fund is right for you?

We've compared the fees, investment options and performance for both Sunsuper and HESTA to help you choose between these two popular super funds.

NOTE: Sunsuper has changed its name to be Australian Retirement Trust, and merged with QSuper. All the previous Sunsuper investment options have remained the same.

Australian Retirement Trust and HESTA are both member-owned super funds which are open to all Australians to join.

Australian Retirement Trust vs HESTA

Let's dive in and compare the two super funds side by side, so you can see which one might be right for you.

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Australian Retirement TrustHESTA
Type of fundPublic-offer industry fundIndustry super fund with a focus on the healthcare sector
Number of members+2 million members860,000 members
Default investment optionAustralian Retirement Trust (formerly Sunsuper for Life) - Lifecycle

This fund is a pre-mixed, diversified fund that invests in a range of assets with a strong allocation towards Australian and international shares and is an authorised MySuper product.

This product is also a lifecycle fund that will automatically reduce your exposure to high-risk assets like shares as you get closer to retirement. It's split into three different life stages.

HESTA Balanced Growth

This is a ready-made investment portfolio with a strong focus on shares, private equity and infrastructure. Unlike Australian Retirement Trust - Lifecycle, the investment allocation is the same for all members in the HESTA Balanced fund, regardless of age. It's an authorised MySuper product.

PerformancePast performance of Australian Retirement Trust (formerly Sunsuper for Life) - Lifecycle Balanced Pool, to June 2023:

  • 10 years: 8.08% p.a.
  • 5 years: 7.99% p.a.
Past performance of HESTA Balanced Growth, to June 2023:

  • 10 years: 7.61% p.a.
  • 5 years: 7.39% p.a.
FeesHere's how much you'd pay in fees for one year if you had the following amounts invested in this product:

  • $5,000 balance: $106.90 in fees
  • $50,000 balance: $507.40 in fees
  • $100,000 balance: $952.40 in fees
Here's how much you'd pay in fees for one year if you had the following amounts invested in HESTA Balanced Growth:

  • $5,000 balance: $94.50 in fees
  • $50,000 balance: $477 in fees
  • $100,000 balance: $902 in fees

 

Additional diversified investment optionsIf you don't want to invest in the default option (Australian Retirement Trust Lifecycle), you can choose to invest your super in one of the following pre-made investment options instead:

  • Growth
  • Balanced
  • Balanced - Indexed
  • Socially Conscious Balanced
  • Diversified Alternatives
  • Retirement
  • Conservative
If you don't want to invest in the default option (HESTA Balanced Growth), you can choose to invest your super in one of the following pre-made investment options instead:

  • High Growth
  • Sustainable Growth
  • Indexed Balanced Growth
  • Conservative
Single asset class investment optionsIf you want to design your own investment mix, you can invest your super in one or more of the following individual asset classes:

  • Shares
  • Australian Shares
  • Property
  • Diversified Bonds
  • Cash
  • Australian Shares (Indexed)
  • International Shares (indexed hedged)
  • International Shares (indexed unhedged)
  • Emerging Markets Shares
  • Australian Property (Indexed)
  • Diversified Bonds (Indexed)
If you want to design your own investment mix, you can invest your super in one or more of the following individual asset classes:

  • Australian Shares
  • International Shares
  • Property and Infrastructure
  • Diversified Bonds
  • Cash and Term Deposits
Ethical investmentThe Australian Retirement Trust Socially Conscious Balanced investment option avoids investment in companies that generate more than 5% of their revenue from alcohol, tobacco, gambling, pornography, coal or nuclear power manufacturing among other harmful industries.

This fund is certified by the Responsible Investment Association Australasia.

Past performance:

  • 1 year: 8.02% p.a.
  • 3 years: 7.11% p.a.
  • 5 years: 7.77% p.a.

If you had $50,000 invested in this product you'd pay annual fees of $472.40.

The HESTA Sustainable Growth option invests in companies "with above average environmental, social and governance performance". It lists its top 20 holdings on its website.

This fund is not certified by the Responsible Investment Association Australasia.

Past performance of HESTA Sustainable Growth:

  • 1 year: 6.14% p.a.
  • 3 years: 5.26% p.a.
  • 5 years: 7.96% p.a.

If you had $50,000 invested in HESTA Sustainable Growth you'd pay annual fees of $642.

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How do the default MySuper products compare?

The two default MySuper options are Australian Retirement Trust (formerly Sunsuper for Life) - Lifecycle and HESTA Balanced Growth. These two products are very similar; both are authorised MySuper products, both are pre-mixed, diversified funds and both have a similar risk level.

However, Australian Retirement Trust Lifecycle is a lifestage fund which adjusts your investment mix in line with your age group. This product will gradually reduce your exposure to growth assets like shares as you get older and closer to retirement, to help minimise your risk of loss and volatility. HESTA Balanced Growth has the same investment mix for all members, regardless of age.

To provide a more comprehensive understanding when comparing these default MySuper products from ART and HESTA, here's a brief overview:

  1. Performance:
    • ART (Lifecycle Balanced Pool). 10-year average annual return of 8.4% and 1-year performance of 9.88%.
    • HESTA (Balanced Growth). 10-year average annual return of 8.02% and 5-year average annual return of 6.56%.
  2. Fees:
    • ART (Lifecycle Balanced Pool). Fees on a $50,000 balance are approximately $547 per annum.
    • HESTA (Balanced Growth). For a $50,000 balance, the fees amount to $477 per annum. For smaller balances, the fees are lower (e.g., $94.50 for a $5,000 balance), and for higher balances, the fees increase (e.g., $902 for a $100,000 balance).
  3. Asset allocation:
    • ART (Lifecycle Balanced Pool). Uses an age-based allocation strategy, shifting from growth assets to more defensive assets as members age.
    • HESTA (Balanced Growth). Maintains a steady allocation of around 70% in growth assets and 30% in defensive assets.

In conclusion, both MySuper products are aimed at achieving growth over the medium to long term. ART's Lifecycle Balanced Pool has a slightly higher 10-year average return compared to HESTA's Balanced Growth, but HESTA's fees are lower for the same balance amount.

The choice between these two funds may depend on individual preferences regarding fee structures, performance history, and specific asset allocation strategies

How do their fees and performance figures compare?

Both these funds have delivered very similar returns over the past three and five year periods. Australian Retirement Trust's default fund has lower fees than HESTA's default fund, which becomes more apparent on larger balances.

For a refreshed comparison of the fees and performance figures for the Australian Retirement Trust (ART) and HESTA, let's look at some of the top-performing options from each brand as of 2023.

HESTA

  • Balanced Growth (MySuper default option): This option achieved a 9.59% annual return for the financial year 2022-2023. Over 10 years, it returned 8.02% per annum.
  • High Growth: This option delivered a 12.58% return for the financial year.
  • Indexed Balanced Growth: This option achieved a 12.47% return for the same period.
  • Sustainable Growth: This option delivered a 9.94% return for the financial year.

For a $50,000 balance, the fees for the Balanced Growth option would be $477 per year.

Australian Retirement Trust

  • Lifecycle Balanced Pool: The 10-year average annual return for this option is 8.4%. The one-year performance was 9.88%.
  • International Shares Index (unhedged): This fund has shown strong performance, with a 10-year annual return of 12.26% and a 5-year return of 10.13%.

For a $50,000 balance in the Lifecycle Balanced Pool, the fees would be approximately $547 per year.

When choosing between these options, consider both the performance figures and the fee structure, as well as your personal investment preferences and risk tolerance.

How do the ethical investment options compare?

Both Australian Retirement Trust Socially Conscious Balanced investment and HESTA Sustainable Growth avoid investments in fossil fuels, tobacco and gambling among many other harmful industries. However, Australian Retirement Trust is certified by the Responsible Investment Association Australasia while HESTA is not.

Both options have similar fees, however HESTA Sustainable Growth has achieved better returns than Australian Retirement Trust Socially Conscious Balanced over the short, medium and long term.

If you're interested in investing your super ethically, you can compare these funds with range of additional ethical super funds in our guide.

How do the additional investment options compare?

HESTA offers five additional pre-mixed portfolio options while Australian Retirement Trust offers seven, so you've got more choice with the latter. Both funds offer an indexed fund option, so if you're looking to invest your super in an indexed fund you can do this with either one.

For the individual sector asset class options, again you've got more choice with Australian Retirement Trust. It offers 11 individual asset class options while HESTA only offers five. The main difference here is Australian Retirement Trust offers several different shares options including indexed, hedged and unhedged options. HESTA doesn't offer an indexed option in its single sector options.

If you're unsure how these different options work with your super fund, here's a guide on superannuation investment options and how to choose between them.

Want to keep comparing?

If you're not yet convinced that either of these funds is right for you, or you simply want to see how they compare to others in the market, you can compare super funds with our guide.

More guides on Finder

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