Home News Super funds with ESG investments snag greater market share, higher returns: RIAA

Super funds with ESG investments snag greater market share, higher returns: RIAA

Australian super funds investing responsibly deliver stronger investment returns than their peers, a new report has found.

By Jacob Cocciolone

on 02 Dec 2021

Fact Checked

Super funds with ESG investments snag greater market share, higher returns: RIAA

Research released Thursday by the Responsible Investment Association Australasia (RIAA), details the average performance of leading My Super responsible investment funds outperformed traditional super funds in their default products over a seven year span.

The increase in performance saw responsible funds grow returns by 87 basis points (0.87%) over three years, 74 basis points (0.74%) over five years and 56 basis points (0.56%) over seven years.

Performance of Responsible Super Leaders.JPG

The Responsible Investment Super Study 2021 covers 53 asset owners, including the largest 48 superannuation funds in Australia regulated by the Australian Prudential Regulation Authority (APRA), as well as five other asset owners.

The study found for the first time responsible investment approaches are influencing strategic asset allocation for the majority of super funds, up to 55% from 39% in 2019.

This means that responsible investment is considered when allocation between different asset classes is rebalanced to meet financial return targets, reflect risk tolerance and time.

Percentage of Super Funds.JPG

Source: RIAA

RIAA CEO Simon O'Connor said this year’s report shows super funds that are doing responsible investment well, are seeing their funds grow, leaving 'laggards' at risk of losing market share.

"Australians are realising the often superior financial performance of leading responsible investment super funds and are moving their money to reap not only the benefits for society and the environment, but their retirement savings as well," Mr O'Connor said.

The study found Australian super funds are improving their responsible investment practices, with 42% of total super assets in Australia covered by funds with such practices in 2020.

Further, the study showed that in the face of rising public concern and increasing financial materiality of climate change, 92% of super funds show that climate risk is actively assessed at a trustee/board level; up from 74% in 2019 and 64% in 2018.

Global Head of Sustainability for investment management company PIMCO, Ryan Korinke, said asset owners in Australia and New Zealand are bellwethers for sustainable investing in the Asia region and globally.

"This makes the results of this study showing their increasing commitment to responsible investment practices, particularly encouraging,” Mr Korinke said.

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Looking to take control of your retirement? This table below features SMSF loans with some of the most competitive interest rates on the market.

Loan amount

Compare

Lender	Advertised rate	Comparison rate*	Monthly repayment	Rate Type	Ongoing Fee	Upfront Fees	LVR	as ofAugust 21, 2024

	6.99^%_p.a.	7.00^%_p.a.	^$2,659	Variable	^$0	^$230	70^%	More details
FEATURED	loans.com.au – SMSF 70 Available for Purchase and Refinance. No application fee and no settlement fee No monthly, annual or ongoing fees Access your SMSF loan via our easy-to-use online app Smart Money
FEATURED loans.com.au – SMSF 70 Available for Purchase and Refinance. No application fee and no settlement fee No monthly, annual or ongoing fees Access your SMSF loan via our easy-to-use online app Smart Money More details
	7.24^%_p.a.	7.25^%_p.a.	^$2,726	Variable	^$0	^$0	70^%	More details
	Firstmac – SMSF 70 (Refinance Special)
Firstmac – SMSF 70 (Refinance Special) More details
	7.25^%_p.a.	7.65^%_p.a.	^$2,729	Variable	^$30	^$1,190	80^%	More details
	Liberty Financial – Liberty Residential SMSF (LVR < 80%)
Liberty Financial – Liberty Residential SMSF (LVR < 80%) More details
	7.55^%_p.a.	7.94^%_p.a.	^$2,811	Variable	^$395	^$1,920	80^%	More details
	Yard – SMSF Loan (Principal and Interest) (LVR < 80%)
Yard – SMSF Loan (Principal and Interest) (LVR < 80%) More details
	7.75^%_p.a.	7.83^%_p.a.	^$2,866	Variable	^$0	^$995	80^%	More details
	La Trobe Financial – SMSF Residential
La Trobe Financial – SMSF Residential More details
	7.49^%_p.a.	7.50^%_p.a.	^$2,794	Variable	^$0	^$230	80^%	More details
FEATURED	loans.com.au – SMSF 80 Available for Purchase and Refinance No application fee and no settlement fee No monthly, annual or ongoing fees
FEATURED loans.com.au – SMSF 80 Available for Purchase and Refinance No application fee and no settlement fee No monthly, annual or ongoing fees More details

SMSF 70

Product Features

Available for Purchase and Refinance. No application fee and no settlement fee
No monthly, annual or ongoing fees
Access your SMSF loan via our easy-to-use online app Smart Money

Monthly repayments:$2,659

6.99%Advertised Rate (p.a.)

7.00%Comparison Rate*

More details

Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of August 21, 2024. View disclaimer.

Important Information and Comparison Rate Warning

Image by Visual Storia - Micheile via Unsplash Visual Stories

Jacob Cocciolone

Jacob Cocciolone joined the Savings team in 2021 as a Finance Journalist. Driven by a passion for keeping Australians up to date with the latest financial news and trends, his areas of interest include financial technology, investing, property and motoring.

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Product Coverage and Sort Order

We strive to cover a broad range of products, providers, and services; however, we do not cover the entire market. Products in our comparison tables are sorted based on various factors, including product features, interest rates, fees, popularity, and commercial arrangements.

Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes.

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Comparison Rate Warning and Base Criteria

For home loans, the base criteria include a $400,000 loan amount over 25 years. For car loans and personal loans, the base criteria include a $30,000 loan over 5 years. These rates are only examples and may not include all fees and charges.

*The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

Monthly Repayment Figures

Monthly repayment figures are estimates that exclude fees. These estimates are based on the advertised rates for the specified term and loan amount. Actual repayments will depend on your circumstances and interest rate changes.

Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you.

Related Brands

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Rates and product information should be confirmed with the relevant credit provider. For more information, read Savings.com.au’s Financial Services and Credit Guide (FSCG).

Super funds with ESG investments snag greater market share, higher returns: RIAA

loans.com.au – SMSF 70

loans.com.au – SMSF 70

Firstmac – SMSF 70 (Refinance Special)

Firstmac – SMSF 70 (Refinance Special)

Liberty Financial – Liberty Residential SMSF (LVR < 80%)

Liberty Financial – Liberty Residential SMSF (LVR < 80%)

Yard – SMSF Loan (Principal and Interest) (LVR < 80%)

Yard – SMSF Loan (Principal and Interest) (LVR < 80%)

La Trobe Financial – SMSF Residential

La Trobe Financial – SMSF Residential

loans.com.au – SMSF 80

loans.com.au – SMSF 80

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Super funds with ESG investments snag greater market share, higher returns: RIAA

loans.com.au – SMSF 70

loans.com.au – SMSF 70

Firstmac – SMSF 70 (Refinance Special)

Firstmac – SMSF 70 (Refinance Special)

Liberty Financial – Liberty Residential SMSF (LVR < 80%)

Liberty Financial – Liberty Residential SMSF (LVR < 80%)

Yard – SMSF Loan (Principal and Interest) (LVR < 80%)

Yard – SMSF Loan (Principal and Interest) (LVR < 80%)

La Trobe Financial – SMSF Residential

La Trobe Financial – SMSF Residential

loans.com.au – SMSF 80

loans.com.au – SMSF 80

Jacob Cocciolone

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Important information

Editorial Integrity

Advertiser Disclosure

Product Coverage and Sort Order

Comparison Rate Warning and Base Criteria

Monthly Repayment Figures

Related Brands

General Advice Disclosure