Is Hostplus worthy of SuperRatings top spot for FY22?

Hostplus’ balanced option is the top-performing option in SuperRatings’ 2022 financial year returns report, with the superannuation fund delivering 1.57%, although Stockspot's founder has disagreed with the result.

The latest SuperRatings report found Hostplus’ balanced fund, which specialises in hospitality workers, had performed best out of 50 options.

Stockspot founder, Chris Brycki said many funds never revealed either the frequency or methodology of their ‘independent’ valuations.

“The analogy I have heard, and think is apt, is that it’s the same as someone marking their own homework and then bragging about being top of the class,” he said.

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“The problem here is that it’s highly questionable whether Hostplus have revalued all of their overweight unlisted assets which include property, venture capital and private equity investments, to reflect current public market valuations as of 30 June, 2022.”

Brycki said if Hostplus was overvaluing their private equity investments (which accounted for 8% of the fund), then this could have overstated impact on the balanced fund returns.

“Hostplus’ private equity and other unlisted investments should have dropped by at least the same quantum as similar assets listed on public markets. How much have Hostplus written their values down by this year? Unfortunately, members and the general public will likely never know.

“Another potential issue is that the trustee of Hostplus has veto power on any valuations they deem unacceptable. They also set the valuation process and have oversight of the valuation process in general.”

Speaking to Super Review, a spokesperson from Hostplus said: "As with all Hostplus investments, we rely on investment managers to undertake valuations according to their long-established processes and protocols on behalf of the Fund. 

"Hostplus manages a diversified long-term investment strategy which comprises thousands of domestic and international companies. This diversified investment strategy is focused on delivering favourable long term investment outcomes for our members."