Investment performance update: July 2026
We know performance matters, so we want to share what shaped returns this year and how we’re positioning portfolios for the future.
The main driver was that the market’s strongest-performing Australian companies and sectors were those our Ethical Charter steers us away from. These are businesses we choose not to invest in because of the harm they cause. The returns they generated this year were the cost of that commitment, while sectors we were more exposed to faced a tougher environment.
Investing for retirement is a long-term journey. Markets move in cycles, and there will be short-term periods when staying true to your values supports performance and periods when it does not.
John Woods, Deputy Chief Investment Officer and Head of Multi-Asset: Our growth, balanced, conservative, defensive and international shares options have all delivered positive returns for members this year.
That said, major market sectors we were less exposed to weighed on overall returns.
It wasn't a simple year by any stretch. Energy supply pressures exacerbated by the war in the Middle East pushed up oil and gas prices.
This added to inflation concerns, pushed up interest rates, putting more pressure on household budgets.
As a result, companies like Woodside, BHP, Fortescue and Rio Tinto were among the market's biggest winners for the year.
Our Ethical process has always steered us away from investing directly in companies like these, unlike other super funds that do invest in them directly.
And our Australian Shares option, which is not as diversified as our other options, was particularly challenged by not being invested directly in these companies.
During the year, your money helped to fund 557 new aged care beds across regional Australia through For Purpose Aged Care, giving families access to quality care closer to home.
It also backed Repurpose It, turning construction waste into reusable materials.
These aren't just good stories. They're real assets that your super is invested in - delivering real world outcomes and supporting your long-term return objectives.
During the year Australian Ethical was also represented in board rooms and at AGMs, including at Westpac, National Australia Bank, Woolworths, Coles, QBE, and Macquarie, where we are pushing boards to do better on issues we believe are important to building a better world.
Your super is invested and doing things that matter. It doesn’t have to be a trade off – investing for a better future.
What shaped returns this year?
FY26 was an unusual year in markets, with a small number of sectors and companies driving a large share of returns. Rising energy prices, fuelled by supply pressures and conflict in the Middle East, boosted oil, gas and resources companies. Woodside, BHP, Fortescue and Rio Tinto were among the market’s biggest winners.
By contrast, healthcare and technology, sectors where we have historically found many of our best investment opportunities, had a tougher time this year. Three interest rate rises made conditions harder for growth-oriented companies in these areas. Concern about the potential disruption from artificial intelligence also weighed on share prices across parts of the software sector.
While these conditions didn’t help short-term performance, we are confident in the quality of the companies we are invested in as they continue to exhibit strong balance sheets, resilient operating performance, revenue growth and long-term growth opportunities.
For members invested in our diversified multi-asset investment options, exposure across different asset classes helped cushion the impact, allowing our Growth, Balanced, Conservative and Defensive options to deliver positive returns. The International Shares option delivered double-digit returns.
How are we positioning for the future?
We are not responding to short-term market movements by changing the principles that have guided us for more than 40 years, but we have been building new investment capabilities to ensure we are finding the best opportunities for members, wherever they are.
However, we have known for some time that the Australian share market presents specific challenges for the way we invest at certain times. So, over the past three years, we have been further diversifying our investment options by including a much wider range of investments beyond Australian shares.
In addition to looking at international equities, this means:
- backing businesses before they list on the share market through venture capital in our private markets portfolio,
- funding the physical infrastructure powering a cleaner economy through our investment in infrastructure debt, or
- investing into other assets that are lowly correlated to listed equities, like affordable housing and social infrastructure.
This is a deliberate, strategic multi-year shift, not a reaction to one challenging year. These investments have grown as a proportion of our investments and contributed to our returns over that period. Over time, we expect this broader approach to reduce our reliance on the Australian listed market and open up more of the opportunities that diversify the portfolio and make it more resilient to market shocks.
Our allocation to assets like these have grown as a proportion of our total investments in recent years, and they are attracting serious partners. The government backed Clean Energy Finance Corporation recently committed up to $125 million to invest alongside us in renewable energy, agriculture, and growing businesses.
Through these types of investments your money helped fund 557 new aged care beds across regional Australia through For Purpose Aged Care, giving families access to quality care closer to home. It backed Repurpose It, turning construction waste into reusable materials.1
Beyond where we invest, we use our influence as shareholders to encourage better outcomes from the companies we own. During the year, Australian Ethical turned up at the Annual General Meetings and behind closed doors engaging with major companies including banks, insurers and retailers on issues we believe matter to long-term value creation and a better future.
How you react now matters
It’s natural to feel concerned when your balance grows more slowly than in previous years. But super is designed to deliver returns over the long term, not from year to year. While market fluctuations can be uncomfortable, making changes in response to short-term movements can sometimes do more harm than good. Before taking action, consider your long-term objectives and whether a temporary market downturn changes the reasons you chose your investment strategy in the first place.
Learn more about understanding your super’s long-term journey.
Super option investment performance – to June 30, 2026
The table below shows the investment performance of a representative selection of Australian Ethical investment options over 1, 3 and 10 year time periods. Please follow the links to see performance of a broader range of options and timeframes on our super and pension performance pages. Past performance is not a reliable indicator of future performance.
| 1 year (%) | 3 years (%) | 10 years (%) | |
|---|---|---|---|
|
Australian Ethical Balanced option |
5.8 |
7.7 |
7.1 |
|
Objective: Consumer Price Index +3.25% (over 10 years) |
7 |
6.8 |
6.4 |
|
Australian Ethical Growth option |
6.5 |
8.6 |
8 |
|
Objective: Consumer Price Index +3.75% (over 10 years) |
7.5 |
7.3 |
6.9 |
|
Australian Ethical Australian Shares option |
-5.8 |
4.6 |
7.9 |
|
Objective: ASX300 Total Return Index (over 7 years) |
5.3 |
9.2 |
7.8 |
|
Australian Ethical International Shares option |
13.6 |
15.3 |
11.7 |
|
Objective: MSCI World Index ex Australia (over 3 years) |
13 |
15.5 |
12.1 |
|
Australian Ethical Conservative option |
4.6 |
4.9 |
7.9 |
|
Objective: Consumer Price Index +1.25% |
5.0 |
4.7 |
7.8 |
Option returns are net of fees and tax. CPI benchmarks are gross. Returns are for the periods outlined to the end of 30 June 2026.
1 Both For Purpose Aged Care and Repurpose It impact stats provided here are collected as part of the impact reporting of Growth Opportunities Fund impact reporting and are as at December 31, 2025.
The information provided does not constitute personal financial advice and has been prepared without considering your objectives, financial situation, or needs. Before making an investment decision, carefully review the FSG, PDS and TMD at australianethical.com.au to consider if the product is right for you. You may wish to seek financial advice from an authorised financial adviser before making an investment decision. Issued by Australian Ethical Superannuation Pty Ltd (ABN 43 079 259 733, RSE L0001441, ASFL 526 055).
Investing ethically and sustainably means that the investment universe will generally be more limited than non-ethical, non-sustainable portfolios in similar asset classes. This means that the portfolio(s) may not have exposure to specific assets which over or underperform over the investment cycle, and so the returns and volatility of the portfolio(s) may be higher or lower than non-ethical, non-sustainable portfolios over all investment time frames.
