Top performing ESG options revealed

In honour of World Environment Day, Rainmaker has ranked the top performing ESG investment options offered by superannuation funds.

Latest Rainmaker analysis shows ESG options offered by super funds are some of the most consistent performers over one, three, five and 10 years.

Compiling the five-year returns of these options to April 2019, Rainmaker analysis sees HESTA's Eco Pool offering come out on top with a return of 10.3% per annum.

Rounding out the top three per annum is the Australian Ethical Superannuation Fund Employer - International Shares option with 9.79%, followed closely by UniSuper's Sustainable High Growth option at 9.74%.

Further, despite the misconception that ethical options underperform, balanced ESG superannuation options outperformed other balanced options in the 12 months to April 2019.

Rainmaker executive director of research Alex Dunnin said the analysis reveals that ESG options perform as well as investment options that do not take ESG principles into account.

The amount being injected into ESG investment products on an annual basis grew by 37% in the 12 months to December 2018. There is now a total of $30 billion held in super funds' ESG strategies.

The super fund with the largest amount is UniSuper with $3.87 billion, followed by AustralianSuper with $2.34 billion.

About $1.5 billion of Christian Super's funds under management is in ESG options, while HESTA and VicSuper have about $862 million and $465 million respectively.

This comes down to greater education, media coverage and political discourse, Dunnin said.

"It is also important to consider that ESG is uniquely defined by the product providers. Each provider may have a different view on ESG principles compared to the investors and what they deem to be socially or environmentally responsible," he added.

Source: Rainmaker Information
Best performing super fund ESG options Annual five-year return to April 2019
HESTA - Eco-Pool 10.3%
Australian Ethical Retail Superannuation Fund Employer - International Shares 9.79%
UniSuper - Sustainable High Growth 9.74%
AMP SignatureSuper - Responsible Investment Leaders International Shares 9.61%
Mercer Super Trust Corporate Super Division - Mercer Socially Responsible Shares 7.53%
Christian Super - Ethical High Growth 7.39%
NGS Super - Socially Responsible Diversified 7.36%
Equip MyFuture - Sustainable Responsible Investments 7.32%
WA Super - Sustainable Future 7.24%
Lutheran Super - High Growth All Australian Shares Socially Responsible Investment 7.05%

Read more: RainmakerHESTAUniSuperAustralian EthicalChristian SuperWorld Environment DayAlex DunninAustralianSuperVicSuper
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