Best ethical super fund
Australian Ethical Super Balanced
Superfund | Australian Ethical Super Balanced |
---|---|
Fees on $5k balance (p.a.) | $121.50 |
Fees on $50k balance (p.a.) | $603 |
Fees on $100k balance (p.a.) | $1,138 |
The information in this table is based on data provided by SuperRatings Pty Limited ABN 95 100 192 283, a Corporate Authorised Representative (CAR No.1309956) of Lonsec Research Pty Ltd ABN 11 151 658 561, Australian Financial Services Licence No. 421445. In limited instances, where data is not available from SuperRatings for a product, the data is provided directly by the superannuation fund.
*Past performance data and fee data is for the period ending August 2024
An ethical super fund is one that invests its members' money in an ethical or socially responsible way.
Ethical can mean different things to different people, but generally it involves supporting companies and industries that are making a positive impact on our communities and on our environment, while actively excluding those that are making a negative impact.
Ethical investing has become more popular in recent years, and now accounts for 36% of the investment market in Australia.1
An ethical super fund is one that chooses investment options based on a set of social, environmental and ethical criteria. There is no set approach or rule to how ethical funds invest, but here's a list of the investments ethical funds tend to include and exclude from their portfolios.
Some ethical investment funds also conduct a "best of sector" approach. This involves looking at a particular sector, for example banking, and selecting the companies that best meet its ethical criteria.
For example looking at all the banks, and instead of deciding that none meet the ethical criteria, investing in the one that is the closest fit. This way, you're still benefiting from the investment diversification and performance of that sector.
There are several factors you should consider before choosing an ethical super fund, including:
The Responsible Investment Association of Australasia (RIAA) offers a Responsible Investment Certification to certain funds that meet its criteria. Some fund that have received this accreditation are Australian Ethical, UniSuper, Aware Super, Future Super and Australian Retirement Trust. A fund doesn't need to have this certification to be considered 'ethical', however it's handy to know that those that do have been independently verified.
While past performance does not indicate future performance, it's definitely worthwhile checking a super fund's investment performance to see the returns it has generated over the long term (for example 10+ years).
Take a closer look at the individual companies the fund will invest your money in. You'll find this information on the fund's website, or by contacting the fund directly. Are there any there that do not align with your values and beliefs?
How rigorously does the super fund screen companies it considers for investment? Does it use negative screening, positive screening and/or a best of sector approach?
Some ethical super funds can charge quite high fees, in comparison to regular MySuper funds. You may decide this it worth it for you personally, based on your investment values. However, it's still worth comparing the fees among ethical funds themselves as these can vary greatly. A general rule of thumb is to aim for annual fees that are around 1% of your balance or less.
Check how aggressively the ethical fund invests in growth assets like shares, and if this aligns with your desired risk level.
We've narrowed it down to our 2 top picks, based on a range of selection criteria. However, keep in mind that our top picks may not always be best for you. Based on your situation, you may find certain features to be more or less important, so compare super fund options before you apply.
Best ethical super fund
Australian Ethical Super Balanced
Superfund
Australian Ethical Super Balanced
Fees on $5k balance (p.a.)
$121.50
Fees on $50k balance (p.a.)
$603
Fees on $100k balance (p.a.)
$1,138
What we like about Australian Ethical Super Balanced:
Best low-fee ethical super fund
UniSuper - Balanced
Superfund
UniSuper - Balanced
Fees on $5k balance (p.a.)
$121.50
Fees on $50k balance (p.a.)
$351
Fees on $100k balance (p.a.)
$606
What we like about UniSuper:
Keep an eye out for funds that make misleading or exaggerated claims about their ethical status in their marketing materials. According to the Finder Green Report 2023, ASIC issues more than $150,000 worth of greenwashing-related fines to financial service companies between October 2022 and May 2023.
Ethical super funds have consistently performed as well as regular funds over the last few years, according to data from SuperRatings1. Over the last financial year, balanced ethical super funds like the Raiz Emerald (14.8%) and UniSuper Sustainable Balanced (12.2%) funds actually outperformed or equalled the best-performing standard balanced fund, before fees.
Here's how to change super funds in 4 steps:
1. Choose an ethical fund. The comparison table above can help you choose a new super fund.
2. Join the new fund. Complete the online application form on the fund's website.
3. Move your super into your new fund. Enter the details of your previous fund when you submit the application form and the new fund will arrange for your balance to be transferred over.
4. Let your employer know. Let your employer know right away so they can pay your next super guarantee payment to the correct fund.
Have you decided an ethical super fund isn't what you're after? Maybe one of our best performing super funds picks will be right for you instead.
There's two types of ethical super funds. The first option is a super fund which only offers ethical investment options to members, like Australian Ethical Super. These funds apply their ethical investment approach across all their products.
The other option is a retail or industry super fund that offers one dedicated ethical investment option among several other investment options, for example AustralianSuper or Australian Retirement Trust. These funds will usually offer a MySuper balanced investment option as the default option to members, and a socially responsible or ethical option for members who want to select this instead. However, the ethical investment approach isn't applied across all the fund's products.
Fees vary between funds, but ethical super funds do tend to charge slightly higher fees than some default MySuper funds offered by retail and industry funds. This is because of the comprehensive research that goes into each investment chosen by a responsible or ethical fund. However, you may find that actively-managed retail funds charge higher fees than some ethical super funds.
A relatively new ethical super fund may charge higher fees than one that has been established for a longer period of time. This is because an increase in the number of members may allow a fund to lower its investment fees.
You don't have to invest in an ethical super fund - the decision is completely up to you as to how your super is invested. The basic premise behind ethical investing is that you put your money where your mouth is to support the causes and companies that match your values and beliefs. For example if you're passionate about climate change and want to see the end of coal mining, making sure your super isn't helping fund the coal mining sector is one way you can personally make an impact.
Spouse super contributions allow you to grow your partner’s super balance and also save money on tax. Here’s how spouse super contributions work.
Making extra super contributions on top of what your employer contributes can help boost your super balance. Here’s how contributions work, how much you can contribute to your super and how to do it.
There are 24.4 million super accounts in Australia with assets totalling $3.9 trillion. Find out the latest superannuation statistics.
We've analysed Australian super funds to find the best-performing super funds, the best industry super funds and the best super fund for low fees. Find the right super fund for you.
Here’s what you need to know about changing super funds including how to do it, the fees that apply, how long it takes and the pros and cons of switching.
Here’s how to choose between the different investment options offered by your super fund, including balanced, growth and ethical options.
Read our overview of superannuation fees you may be required to pay.
There are many ways you can grow your super, including salary sacrifice, making extra personal contributions and reducing your fees. Here are six easy ways to increase your super.
Self-employed super contributions are a great way to boost your retirement savings, but there are some rules. See rules for contributions and compare super funds if you're self employed.
When you start your first job you'll need to open a bank account, a super fund and understand what your tax obligations are.