Have you ever stopped to wonder where your super is invested and where your money is actually going?
This question is more important than ever. The world is moving away from fossil fuels and transitioning to clean energy.
If your money is still invested in fossil fuels, is your retirement savings future proofed?
If you choose an ethical super fund, you can make your money do good for both your future and the planet.
Before you make a change, there are a few things to consider:
How is your super fund managed?
Like most of us, super is probably one of the biggest investments of your life, right up there with buying a home.
Your super fund will invest your money in what the fund’s portfolio managers choose to invest in.
But what if the companies they invest in don’t align with your values?
Dare to ask your super fund if they assess their investments against:
• Climate action
• Treatment of people both in the business and their supply chain
• Sustainability
• Any other issues you’re concerned about.
Does the fund have competitive returns?
Some funds have strong returns that they’ve built up over a number of years.
Others have only been on the market a short time.
You can find out more about the fund’s investment performance on their website, in their annual reports, and resources like the Australian Securities & Investments Commission.
But remember, past performance isn’t always a guarantee of future success.
If you want to invest your super ethically, you don’t need to compromise on investment returns.
According to a recent report, the average ethical fund actually returns more than the average mainstream fund.
How transparent is your fund?
The more honest and transparent a fund is about the companies they invest in, the better.
As a member of a fund, you should know where your money is being invested.
You’ll need to do some research.
The more you know, the more confident you’ll be that the fund suits your values and your investment objectives.
What can you invest in?
Investing ethically is about aligning your environmental and social values with your future, so make sure you do your research, look into different strategies, and find a fund that suits you.
Some funds offer a wide range of ethical investment choices across different risk profiles, and others not so many.
What about insurance?
Before you choose a fund, make sure you find out all you can about the kind of protection it offers, and how competitive and valuable the arrangements are.
Having your insurance with your super is generally a good idea.
It’s usually cheaper than getting the same insurance from an outside provider.
Whatever your definition of ethical investing is, it’s important to understand where your money is invested.
Once you know, you’ll be in a better position to take control of your future.
