POWERED BY MOMENTUM MEDIA
Rice Warner points to exorbitant fees
Superannuation fund members who choose ethical investments need to be careful they are not putting their emotions ahead of value, according to actuarial research house, Rice Warner.
In an analysis of ethical investment options in superannuation, Rice Warner pointed out that statistical evidence suggests that the rates of return between ethical investment options and non-ethical investment options do not vary materially.
However, it suggests that the small amount of assets in ethical options usually means they are more expensive as they lack scale benefits.
"We don't expect any material difference in returns from the style of investing though there will be differences in levels of investment competence," the analysis said.
"Nonetheless, people don't appear to pick these options to get better returns. In most cases, it appears that the decision for ethical investment is primarily emotive."
It said this primarily emotive approach had created a risk that superannuants would trade off their emotions against value in products.
"Unfortunately, this risk has been realised, with some products on the market which appeal directly to a member's sense of social obligation, charging exorbitant fees," Rice Warner said.
In doing so, it published a table (below) in which it compared the fees of mainstream funds such as Australian Super and UniSuper and compared them to the fees of relatively recently-established ethical funds some of which were nearly double those of the mainstream.
Recommended for you
Governor Bullock took a more hawkish stance on Tuesday, raising concerns over Trump’s escalating tariffs, which sent economists in different directions with their predictions.
Equity Trustees has announced the appointment of Jocelyn Furlan to the Superannuation Limited (ETSL) and HTFS Nominees Pty Ltd (HTFS) boards, which have oversight of one of the companies’ fastest growing trustee services.
Following growing criticism of the superannuation industry’s influence on capital markets and its increasing exposure to private assets, as well as regulators’ concerns about potential risks to financial stability, ASFA has released new research pushing back on these narratives.
A US-based infrastructure specialist has welcomed the $93 billion fund as a cornerstone investor.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Global X GlobalX FANG+ ETF
33.51 3 y p.a(%)
2
Spire Oaktree Opportunities XI Second Close
32.68 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.62 3 y p.a(%)
4
Spire Oaktree Opportunities XI First Close USD
31.36 3 y p.a(%)
5
Fidante Credit Suisse Global Private Equity
29.60 3 y p.a(%)
