Understanding your super with Australian Ethical

Putting market movements in context

Markets move up and down all the time. Short‑term market movements often reflect news, sentiment or changing expectations, rather than the underlying value of investments. 

These movements are a normal part of investing. They can also create opportunities for our investment team as they buy and sell investments in companies they believe in, based on their long‑term view of each business. 

For members, it’s important to consider how your investment timeframe shapes the way market movements affect you. Short‑term ups and downs are expected, and they don’t always reflect the bigger picture, especially when investments are managed with different goals and time horizons in mind. 

Australian Ethical Charter

Australian Ethical is driven by a clear set of principles outlined in our Ethical Charter, guiding all investment decisions and shaping our portfolio. Our approach considers financial, environmental, and social outcomes together, recognising the influence that investment choices have on building a fairer and more sustainable economy. 

What your super is invested in

We intentionally invest differently because we want a different outcome – one that creates lasting positive change. That’s why Australian Ethical portfolios don’t just mirror the broader share market. Instead, your super is invested in businesses that: 

• Address real-world needs – like clean energy, healthcare, digital infrastructure and essential services 
• Respect people and animals, championing human rights, labour standards and animal welfare 
• Deliver food and consumer goods more sustainably, prioritising benefits to communities and the environment 
• Grow by innovating and improving efficiency, rather than relying on pollution, depletion or exploitation 

At the same time, our portfolios deliberately restrict investments in businesses that:

• Rely on high carbon emissions or fossil fuel extraction 
• Engage in resource-heavy or polluting activities, including some forms of mining 
• Follow practices that significantly harm people, animals or ecosystems, or face growing regulatory, social or cost pressures. Please read our Ethical Guide for more information about our ethical decision-making. 

We believe that by choosing a different path – one built on ethical intention and long-term thinking in addition to financial analysis – your super can be better set up to weather market cycles and drive the kind of future we believe we all want to see. 

Investing in this way doesn’t mean your super avoids risk or volatility – all investments carry risk. But it does mean your super reflects a clear view of the kinds of businesses we believe are better placed to endure and contribute positively as the economy evolves. 

These differences are intentional. They reflect long‑term portfolio choices, not reactions to short‑term market movements. 

* Compared to a blended share market Benchmark of S&P ASX200 Index (for Australian and NZ shareholdings) and MSCI World ex Australia Index (for international shareholdings). For the purpose of this sector analysis, GREIT exposures within our Property strategy have been excluded from portfolio calculations.

^ Compared to a blended benchmark that best reflects the benchmarks used by the underlying investment strategies. Based on holdings at 30 June 2025 and analysis tools provided by external sources which cover ~74% of the investments we hold by value other than wholesale cash fund and mandates. Both carbon intensity and sustainable impact solutions revenue relate to the listed companies and public corporate fixed income securities in which we invest across our funds and options. This should not be considered representative of individual funds or options which will have their own mix of share and other investments. See pages 153 to 155 for more information about this comparison. 

+ Our investment restrictions include some thresholds. Thresholds may be in the form of an amount of revenue that a business derives from a particular activity, but there are other tolerance thresholds we can use depending on the nature of the investment. We apply a range of qualitative and quantitative analysis to the way we apply thresholds. For example, we may make an investment where we assess that the positive aspects of the investment outweigh its negative aspects. For information on how we make these assessments for a range of investment sectors and issues such as fossil fuels, nuclear power, gambling, tobacco, human rights, and many others, please read our Ethical Guide.

Why we invest this way for the long term

Super is usually a long-term investment, depending on your life-stage and investment objectives. For many, particularly those at the beginning or middle of their journey, it can be measured in decades rather than years.

A long horizon allows for a different way of thinking about growth and resilience. Instead of focusing on what’s performing well right now, the investment process looks at: 

• industries with durable demand over time 
• our fundamental valuation of companies relative to how they are currently priced   
• long-term structural trends such as digitalisation, ageing populations and the transition to a lower carbon economy 

It can be tempting to judge an investment strategy based on recent results alone. But short-term outcomes often reflect where markets are in their cycle, rather than whether an approach is sound.  

When certain sectors rise quickly, funds that avoid or are underweight in those sectors may lag for a time. That doesn’t necessarily indicate a problem. In many cases, it means the fund is staying true to its stated approach rather than shifting course to follow the market. 

Over longer periods, investment outcomes tend to be driven less by any single year and more by consistency of approach, discipline, enduring thematics and time in the market. Past performance is not a reliable indicator of future returns. 

Past performance is not a reliable indicator of future returns. 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.

Why staying invested matters

History shows that markets move up and down, often unpredictably. Some of the strongest gains can occur after periods of uncertainty.  

Read more about why staying the course can be a good idea.

The role of values in investing 

Beyond financial outcomes, members may value knowing their super is invested in line with ethical values.  

This can provide confidence that your money is contributing to build a brighter future.