In the last three months, we’ve seen share markets move up and down. We call this ‘market volatility’, and it’s taken some investors by surprise.  

Volatility is normal, and caused by several factors. This year, we think a major reason for the inclines and declines was how expensive the markets were in the middle of 2024.  

Back in July 2024 we talked about how markets in Australia, the United States – as well as many other regions around the world – were at, or close to, their highest levels ever. When markets are expensive (worth more), there’s a greater risk they can dip. And that’s what happened in August and September.

The good news is our funds performed well during the volatility of the last three months. 

We’ve talked about how our approach to investing errs towards caution when it comes to shares we think are overvalued. Investing this way means the dips don’t impact our performance as much. The flip side is that our short-term performance doesn’t get as much of a bump when there’s a sharp incline in market values. But having a measured approach to growth means that we don’t rise or drop quickly, but maintain steady growth over the long-term. In superannuation, when most people are investing for thirty plus years, the long-term is what matters most to us. 

We are not the same as a lot of other super funds, which is probably why you are with us. Our portfolios look different because they reflect our purpose to invest for a better world. 

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Australian Ethical super option performance vs. target returns

*Option returns are net of fees and tax. CPI benchmarks are gross. Returns are for the periods outlined to the end of September 2024. Past performance is not a reliable indicator of future performance.

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What's happening with mining companies?

We restrict investment in extractive industries like mining, but how shares in these companies perform still affects our relative returns – that is, how we compare to our mainstream competitor funds and the broader market that do hold them.

Energy and mining companies have had a tough 12 months or so. The reason? China’s economy has slowed, resulting in China not building as much, which in turn creates less demand for commodities like iron ore, which is used to make steel and other kinds of industrial materials.  

This has been a positive trend for our funds (although we do own some miners of minerals that contribute to the energy transition, like Lithium used in batteries for instance). The lower allocations we have to miners and energy companies compared to the broader market and many of our competitors has helped our returns over the period. 

However, there will be times this trend reverses, and it will have a negative effect on the relative performance of our funds in the short term. This happened at the end of September, when the Chinese government pumped some money into its economy. As a result, shares in Aussie mining companies picked up.  

There will be times our funds perform differently than our peers and the broader market, it’s because we are different. That difference derives from what we do and don’t invest in, following our Ethical Charter.  

We believe over the long term our way of investing can generate investment returns while helping to make a better world. Our long-term performance shows you can invest ethically and generate investment returns. 

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Balanced Fund Super Option return is net of investment fees, admin fees and tax, gross of $-based member fee.

Peer fund benchmark was Morningstar Multisector Balanced - Superannuation index until Mar-2015, Morningstar Multisector Growth - Superannuation index until Dec-2019, SuperRatings SR50 Balanced (60-76) Index to current. Peer fund return is net of investment fees, admin fees and tax, gross of $-based member fee.