Australian Ethical’s MySuper option has defied market volatility, delivering impressive returns in the past year. The fund’s Balanced Fund achieved a 10.5% return, while the growth fund and high growth fund saw returns of 11.5% and 12.8%, respectively. This performance has been attributed to the fund’s limited exposure to fossil fuel companies.
John Woods, Australian Ethical’s deputy chief investment officer, highlighted that ethical investments can yield robust returns in line with investors’ values. The fund’s strategic approach integrates ethical considerations, enhancing risk management and due diligence, thereby safeguarding portfolios during market fluctuations.
Woods emphasized the fund’s commitment to future-focused investments that align with its Ethical Charter, promoting positive impacts on society, animals, and the environment. The team’s disciplined process involves adjusting holdings, exploring defensive exposures, and actively managing fixed income to optimize returns.
Furthermore, Australian Ethical actively engages with investee companies and advocates for positive change in corporate practices and policies. Through its ethical stewardship program, the fund has urged companies like QBE Insurance and Westpac to transition away from financing fossil fuel projects towards a net-zero future.
Over the long term, Australian Ethical’s Balanced Fund has delivered consistent returns, averaging 6.8% per annum over the past decade. The fund’s asset allocation targets a mix of growth and defensive assets to achieve inflation-adjusted returns after fees and taxes.
The fund’s success underscores the growing trend towards ethical investing, where investors seek financial returns while supporting sustainable and socially responsible initiatives. This aligns with a broader shift in the investment landscape, with more emphasis placed on environmental, social, and governance (ESG) factors.
Experts suggest that the performance of Australian Ethical’s MySuper option reflects a broader shift in investor preferences towards sustainable and ethical investments. As awareness of ESG considerations grows, fund managers are increasingly integrating these factors into their investment strategies to meet evolving investor demands.
Market analysts anticipate that the success of Australian Ethical’s ethical investment approach may serve as a model for other super funds looking to balance financial returns with social impact. This shift towards responsible investing is reshaping the financial industry, influencing how funds allocate capital and engage with companies on sustainability and governance issues.
Overall, Australian Ethical’s MySuper option’s strong performance amid market volatility underscores the potential for ethical investing to deliver competitive returns while driving positive change in the financial sector. As investors increasingly prioritize sustainability and ethical considerations, funds that embrace these principles are well-positioned to attract and retain a new generation of socially conscious investors.
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