POWERED BY MOMENTUM MEDIA
Super funds falling short on ethical options
Superannuation funds aren’t providing adequate high-quality, ethical and sustainable investment options, a survey of advisers has found, with the fact the industry doesn’t require that funds disclose their underlying investments one possible reason why.
The survey, which was completed by advisers representing over 3,300 clients with funds of over $1.5 billion in ethical investments, found that many funds fell short of the demands of the average ethical investor.
Chair of the Ethical Advisers Co-operative (EAC), Terry Pinnell, blamed this on “green-washing”, meaning that funds could claim to have ethical investment options without having to substantially prove the claim.
“At present there are currently no industry requirements for funds to disclose to members those underlying companies in which their money is invested,” EAC said. “Like the ‘free-range’ eggs controversies of recent years, this has created a situation ripe for exploitation by businesses which claim to meet consumer demands yet are not required to provide consumers with the means of verifying their claims.”
EAC used the survey results, which were sourced from its members, to award funds ‘green leaf’ ratings based on the reality of the funds’ investments compared to the expectations of advisers’ average ethical investor.
Some big super funds received ratings of two ‘green leaves’ out of a possible five, with options ‘ethical’ options from AustralianSuper, UniSuper, First State Super, Hostplus and Sunsuper all amongst those awarded these low scores. Future Super and Australian Ethical Super were the two highest performers, receiving 4.5 and four ‘leaves’ respectively.
There was little consistency to the ratings however, with a mixture of super funds and fund options being rated and just 12 offerings in total receiving scores. Considering the plethora options and funds available, this could hardly be called a meaningful sample.
Recommended for you
Super funds had a “tremendous month” in November, according to new data.
Australia faces a decade of deficits, with the sum of deficits over the next four years expected to overshoot forecasts by $21.8 billion.
APRA has raised an alarm about gaps in how superannuation trustees are managing the risks associated with unlisted assets, after releasing the findings of its latest review.
Compared to how funds were allocated to March this year, industry super funds have slightly decreased their allocation to infrastructure in the six months to September – dropping from 11 per cent to 10.6 per cent, according to the latest APRA data.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.73 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
30.15 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.71 3 y p.a(%)
