ESG super options coming at a cost

Superannuation fund members investing with a conscience may be losing retirement savings as a result, with sustainable options often coming at the cost of higher fees and lower returns.

The median performance of sustainable options is lower than an index constructed by SuperRatings of traditional balanced funds, as well as having higher median fees, according to data from the research house.

There are however, some sustainable funds that outperform the market, with offerings by HESTA, VicSuper, AustralianSuper, WA Super and UniSuper all delivering strong returns at competitive fees, as shown in the table below.

Related News:

Of course, it should be noted that not all sustainable options are created equal. While some simply apply a screen on certain industries, other perform in-depth analysis of individual companies, which obviously comes at a cost.

SuperRatings acknowledged that “this makes it hard to provide a definitive ranking of sustainable fund performance”, with its executive director, Kirby Rappell, saying that: “When considering sustainable alternatives, it is important to look at each individual fund’s mandate, their process for investing sustainably, and of course the industries and businesses they do and do not invest in.”

Related Content

Sustainable investment drives shift in wealth philosophy

Sustainable investing (SI) has rightfully evolved to now be considered a mainstay of the global investment landscape. But as with all new concepts, on...Read more

Australian market for passive strategies lags behind other mature market

Although Australian investors are demonstrating an ongoing preference for passive strategies  compared to larger and more mature markets, such as...Read more

ESG factors drive more investment decisions

The influence of the environmental, social and governance (ESG) factors have been on the rise when it comes to the investment decision making process,...Read more



Add new comment