Why Aussies are changing superannuation funds

Almost 8 million Aussies (46 per cent) with superannuation or managed funds are considering switching to a more sustainable option over the next two years, new research has found, with younger women most likely to make the switch.

The majority (87 per cent) of Aussies thought a sustainable investment option was appealing, the Colonial First State survey of more than 4,500 people found. But a lack of knowledge about sustainability (50 per cent), concerns about fund performance (41 per cent) and fees (34 per cent) were the main barriers stopping Aussies from making the switch.

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Independent financial adviser and the head of advice at Bruining Partners, David McGregor, said many Aussies were keen to invest sustainably, but they didn’t want to do so at the detriment of their returns.

“At the end of the day, it’s important that your money services your purpose, which is to fund your retirement,” McGregor said.

McGregor recommended checking the fund’s investment fees and performance. Independent research ratings companies like MorningStar could give you an idea of performance, he added.

Check what the fund is invested in

Superannuation funds can avoid investing in ‘bad’ industries, such as fossil fuels, weapons, animal testing and tobacco. They can also positively invest in ‘good’ industries, such as renewable energy and affordable housing.

It’s worth taking the time to see what the fund is and isn’t invested in, McGregor said, but be prepared for the fund to not meet every single one of your values.

“Unless you have enough money to create your own bespoke portfolio, which is usually more than $1 million, you just need to find one that strikes the right balance for you,” he said.

Christian Super, for instance, has religious-based values and has made impact investments in renewable energy and community infrastructure. On the other hand, they also value the “sanctity of life” and don’t invest in companies that create oral contraceptives or IUDs.

Aussies ranked climate change solutions (36 per cent), affordable housing (36 per cent), protecting the natural environments and biodiversity (33 per cent) and healthcare solutions (33 per cent) as the top four areas they wanted to invest in.

On the other end of the scale, Aussies wanted to avoid investing in weapons and firearms (39 per cent), animal cruelty (38 per cent), pornography (33 per cent) and tobacco (31 per cent).

The research comes as Colonial First State launches its Thrive+ sustainable growth fund in partnership with former US vice-president Al Gore.

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