Beneath the surface of moral posturing, Australian retirement funds are helping keep Israels war economy alive, writesJemma Nott.

WHENHESTA, the super fund for Australia's health care workers, announced it would divest from companies linked toIsraels illegal settlements, its members applauded a moral stand.

Hostplushas similarly been applauded fordivesting from nuclear weapons, while remaining firm on its other military industry investments.

However, both of these superannuation funds still have one thing in common with nearly every superannuation fund in Australia their members funds are still directly funding operations in Israel.

During the genocide in Palestine, Israel has undertakenseveral key debts, which continued to finance the war. Israels military expenses have naturally ballooned as war spending alone has hit 1 billion shekels (AU$468.2 million). The Government has stated that new bond issues are necessary not just to continue to cover the cost of the war but also thebudget deficit itself.

Israel, therefore, must borrow in foreign currency to supplement its local debt markets. On 12 March 2024, Israel took out US$8 billion (AU$12.3 billion) inSEC-registered bonds. The underwriters of these loans included the joint book runners ofBNP Paribas,Deutsche BankandGoldman Sachs.

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Prior to that, they took out US$5 billion (AU$7.7 billion) inU.S.-denominated loansunderwritten byBank of America,Citigroup, Deutsche Bank, Goldman Sachs andJP Morgan. These banks and financial institutions have become the most common underwriters, directly funding the genocide of Palestinians since7 October.

They are also banks that are deeply embedded in the financial infrastructure of the Australian economy. Much attention has been given in recent months to the superannuation funds in Australia that invest in weapons manufacturers. But many of these same superannuation funds also have custodian arrangements with these exact same banks that have key financial interests in Israel.

HESTA has repeatedlyappointed JP Morgan, the largest custodian in Australia, as its global custodian, meaning the third-party manager of its superannuation funds investments. Similarly,HostplusandTelstraSuperhave appointed JP Morgan as their custodian.

UniSuperhas appointed BNP Paribas as its custodian. So, even where in the case of Hostplus or HESTA, a superannuation fund has on the surface divested from weapons manufacturers, they are still providing custodian fees directly from Australian superannuation funds to the exact same financial entities that are the primary reason for the survival of the Israeli war machine.

The JP Morgan securities services revenue, which includes custodianship,rose by 7 per centin 2024 to over $5 billion. Looking at this figure, we can start to get a larger global picture of how much not just Australian but global retirement funds functionally are embroiled in the financing of Israeli military activities.

U.S. PresidentDonald TrumpsGaza Board of Peaceproposal, which is essentially designed to carve up Gaza and build luxury real estate with Gulf-state backing along the Riviera, includes former UK Prime MinisterTony Blair, who, among other things, was a senior advisor at JP Morgan.

CEO of JP MorganJamie Dimontook a more recent turn towards Trump after the 2025Davos economic forum, telling CNBC that Trump waskind of rightabout a host of issues.

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Dimon would be an incredibly important key in the broader vision of a major project like the Gaza plan. JP Morgan structures the investment funds and invests in larger port projects, while institutions likeJared Kushner'sAffinity Partnersinvest in luxury real estate. Of course, where the U.S. is providing loan guarantees, once again, it'sthe U.S. taxpayer wholl incur that risk and not JP Morgan.

Hostplus recently announced a partnership withApollo Global Managementfor an Asia Pacific credit strategy. The head of Apollo Management,Marc Rowana vocal Zionist was reported to have alsobeen floatedfor the Gaza Board of Peace. While this was never confirmed by Rowan, Apollo Managements investments in Israel, includingPhoenix Holdings Ltd, an Israeli-based insurance, asset management and financial group, are extensive.

Under the arrangement, Pheonix can co-invest with Apollo Management and participate in up to $2 billion of investments.

The question ultimately remains: given that custodian banks are directly financing the conflict and their private equity partners are currently designing a future for Gaza that prioritises investor returns over human rights, what is the tangible meaning of a fund's ethical policy? Is it a genuine commitment, or is it merely a marketing strategy that collapses upon contact with the architecture of global finance?

Jemma Nottis a Political Economy post-graduate student at the University of Sydney and a freelance writer.

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