Responsible investments show competitive returns

Responsible investments in sustainable superannuation funds were competitive with mainstream investment options, as returns exceeded or remained on par with mainstream options, SuperRatings found.

The annual survey of sustainable funds found sustainable balanced funds generated a median 11.9 per cent return during the 12 months to April 2015, compared to 12 per cent for the broader SuperRatings SR50 Balanced Index.

But when it came to the higher growth Australian shares options, sustainable Australian shares funds outperformed, producing a 10.5 per cent median return during the year to April, compared with 9.5 per cent for the median Australian shares option.

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SuperRatings chief executive, Adam Gee, said the data should boost fund managers' confidence when thinking about environmental, social and governance issues in their investment decisions.

"The performance data clearly shows responsible investment options remain competitive with mainstream superannuation investment options," he said.

SuperRatings found that as awareness of sustainable investments increased, funds were adopting an "entire portfolio" approach to sustainability and responsible investing instead of only offering members exposure through dedicated investment options.

SuperRatings also found the average fee among the 2015 Infinity Recognised funds was $550 for a balanced option with a $50,000 account balance, compared to $667 for all balanced funds.

Sustainable balanced funds outperformed balanced index over three years, returning 12.3 per cent compared to 11.9 per cent, while sustainable Australian shares returned 14.4 per cent while Australian shares index return 13.6 per cent.

But mainstream options outperformed sustainable options over five years.

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