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Ethical Investing FAQs
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Start by listing what you want to avoid and what you want to support. Then check what your super and existing investments already hold. I turn your list into a diversified portfolio and test it against your goals.
Ethical investments are taxed like any other investment. Dividends and distributions are taxable income (opens in a new tab), franking credits (opens in a new tab) may apply, and capital gains tax applies when you sell (opens in a new tab). Inside super, earnings are taxed at up to 15% while you build your balance, and 0% in retirement phase up to the transfer balance cap.
Yes. An SMSF can hold ESG-focused funds (opens in a new tab), ETFs, or direct shares, provided they fit the fund’s investment strategy. Under Regulation 4.09 (opens in a new tab) of the Superannuation Industry (Supervision) Regulations 1994 (opens in a new tab), trustees must formulate that strategy, give effect to it, and review it regularly. I help write a strategy that covers your ethical aims and your duties as a trustee.
Not automatically. Companies with strong ESG practices (opens in a new tab) may face fewer fines and scandals. But excluding whole sectors can make a portfolio less diversified. I balance ethical holdings with defensive assets such as bonds and cash.
Some ethical funds charge more because of screening and active management. Others, including some ethical ETFs, charge low fees. I compare each fund’s annual fees and costs over the time you’ll hold it.
Yes. Many super funds offer an ethical or sustainable investment option, and you can switch within your existing fund. An SMSF or an account-based pension can hold ethical investments too. I check the option’s holdings and fees, and how it fits your retirement income.
Negative screens exclude industries such as fossil fuels, tobacco, gambling, and weapons. They can also exclude companies with poor labour or environmental records. Positive screens favour sectors such as renewable energy and healthcare, or companies leading on sustainability. Funds apply these differently, so I check how each one defines its screens.
Some ethical funds have matched or beaten their benchmarks over long periods, and some have lagged. Excluding sectors means your returns will differ from the broad market, in both directions. Past performance is not a reliable indicator of future returns. I compare each fund’s performance against its benchmark and its fees before recommending it.
Ethical investing chooses investments using environmental, social, and governance (ESG) criteria (opens in a new tab) as well as financial ones. It can mean excluding industries, favouring companies with strong practices, or both. I build those preferences into a portfolio that still suits your risk profile and retirement goals.