Hostplus chief investment officer Sam Scilia has expressed confidence the $87 billion super fund can navigate turbulent economic conditions and deliver strong performance after it defied shaky markets to eke out a positive return for the 2021 financial year.

The fund, which invests on behalf of 1.5 million members in the hospitality, tourism and recreation industries, and is known for its aggressive investments in tech, recorded a 1.57 per cent return on its balanced option for the year to June 30. More than 85 per cent members are invested in the balanced option.

The balanced option has returned 7.76 per cent per annum over five years, 9.74 per cent a year over 10 years, and 8 per cent over 20 years. This year’s result follows a record 21.3 per cent gain in 2020 financial year.

Australia’s largest super fund, AustralianSuper, revealed last week it had recorded its first negative return since the global financial crisis, amid expectations most super funds returns will be in negative territory this year due to challenging economic conditions. Superannuation fund balances have slumped an average 4.4 per cent in the past 12 months because of falls in the global sharemarket.

On Wednesday, Sicilia said the fund’s success was due its focus on active management, rather than passively managed indexed products. Being overweight in unlisted assets such as infrastructure and real estate had provided protection against inflation, he said.

“One of the benefits of unlisted assets is that they’re not subject to the whims of the volatility of equity markets,” he said.

“Super funds who can’t tolerate the illiquidity of real estate, of infrastructure, they choose not to invest there, they suffered a lot. Our belief is [in] active management and diversification - so as many asset classes as possible to spread the risk - and in particular, we believe in mid-risk assets, unlisted infrastructure and unlisted real estate, and those performed particularly well.”

A decision in 2015 to reduce exposure to bonds also contributed to the positive result, with bond markets suffering negative returns this financial year.

Some private equity and venture capital investments also did well, Sicilia said. While investor concerns about inflation and higher interest rates have smashed tech company valuations this year, with sharp a sell-off in listed tech stocks, Sicilia said he will “absolutely” continue to invest in tech.