Your super isn't just growing for retirement, it's funding companies today. Here's how to see if those investments match your values.
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All information contained in this article is general advice only.
Most of us think about money in terms of what it can do for us.
It can pay our bills, help buy our dream home and eventually fund our retirement.
To reach these goals earlier, people may have their money invested, and for Aussies, that includes the money sitting inside our super accounts.
But before this money funds your retirement brunches #smashedavo, every dollar you invest has another job.
That’s because your super is hard at work, invested in businesses, industries and projects all around the world.
The question is, what is your money funding?
If you've never chosen an investment option inside your super fund, there's a good chance your money is sitting in a default investment option.
Generally, that's not necessarily a bad thing.
But it does mean your money could be invested in companies or industries you haven't actively chosen yourself.
Depending on the fund and investment option, that could include sectors like fossil fuels, gambling, alcohol, weapons manufacturing or tobacco.
Whether that's important to you is a personal decision.
But it's one reason to take a closer look at where your super is being invested.
Ethical investing is an approach to investing that considers more than just financial returns.
Outside performance, ethical investors may also consider how a company operates, the industries it participates in, and the impact it has on people and the environment.
For some investors, that means avoiding certain industries altogether.
For others, it's about supporting businesses they believe are contributing positively to society.
And now, more Australians are paying attention to what their super fund is supporting in the interim.
According to the Responsible Investment Association Australasia (RIAA), 88% of Australians expect their investments to be responsible and ethical. Views on ethical investing differ between investors and there is no universal definition of what constitutes an ethical investment.
So what does that look like in practice?
This is the simplest approach.
It’s where certain industries, companies or activities are excluded from a portfolio altogether.
For example, an investor might choose not to invest in companies involved in gambling, tobacco, fossil fuels or weapons manufacturing.
Think of it as creating a "no thanks" list.
ESG stands for Environmental, Social and Governance.
Rather than automatically excluding companies, ESG investing considers factors like carbon emissions, workplace practices, board diversity and corporate governance alongside traditional financial analysis.
The goal isn't necessarily to avoid entire industries.
It's to better understand how sustainability-related risks and opportunities could affect an investment over time.
Instead of simply avoiding harm or assessing sustainability factors, impact investing actively seeks investments that aim to create positive environmental or social outcomes.
That could include areas like renewable energy, affordable housing, healthcare or education.
With investing, there’s no right or wrong answers because everyone has a different set of values.
One person might want to avoid fossil fuels. Another might be focused on renewable energy. Someone else may simply want sustainability considerations factored into investment decisions.
There's no single definition of what ethical investing should look like - and that's why flexibility matters.
Having access to a range of investment options can give you more control over how your retirement savings are invested and whether those investments align with what's important to you.
For Australians who want to get more hands-on with how their super is invested, Netwealth Super Accelerator provides access to a broad range of investment options, including shares, ETFs and managed funds. As with any investment, these options carry varying levels of risk, and the value of your investment can go up as well as down. Before deciding whether to invest, consider whether Netwealth Super Accelerator is appropriate for you and read the PDS and TMD, available on the Netwealth website.
That means members can build a portfolio that reflects their own goals, risk tolerance and investment preferences, including sustainability and ethical considerations where relevant. It's worth keeping in mind that ESG screens, methodologies, exclusions and underlying holdings reflect the current approach and product design, these can change over time as market conditions, regulations or strategies evolve.
While super is designed to fund your future retirement, it might also be worth understanding what it's helping fund today.
Flux disclaimer:
The Information contained in this article is general information. It does not constitute legal, tax, credit or financial advice and is not tailored to an individual’s circumstances. You should consider your own personal circumstances and seek advice from your professional advisers before making any decisions that may impact your financial situation.
Netwealth disclaimer:
All information contained in this article is general advice only. It does not constitute legal, tax, credit or financial advice and is not tailored to an individual’s circumstances. You should consider your own personal circumstances and seek advice from your professional advisers before making any decisions that may impact your financial situation.
Netwealth Superannuation Services Pty Ltd issues Netwealth Super Accelerator. Netwealth Investments Limited issues the Netwealth Wealth Accelerator Multi-Asset Portfolio Service. Information contained within this post is of general nature only. Consider whether the products are appropriate for you and seek advice where required. To help you decide, read the PDS’s or IDPS’s Guide and TMD’s available at Netwealth - Super & Investment Solutions - Investors & Wealth Professionals.
The Information contained in this article is general information. It does not constitute legal, tax, credit or financial advice and is not tailored to an individual’s circumstances. You should consider your own personal circumstances and seek advice from your professional advisers before making any decisions that may impact your financial situation.
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