As CEO of Future Super, I’m very proud to report that in the 19-20 financial year, our three investment options were the first, second and third best performing balanced options in Australia - that’s according to the SuperRatings Fund Crediting Rate Survey - Balanced (60-76) over 12 months to 30 June 2020.
Over the past financial year, each of these investment options delivered returns over 5.2%*. This result comes at a time when the average super investment option in the balanced category delivered negative returns**.
In many ways (struggling oil and aviation markets being just some examples), this financial year felt like a test for what will happen as climate issues become more unavoidable and as harmful industries like fossil fuels lose their social license to operate.
Our clear principles on what makes good investment for the future have stood up to this test.
Surpassing our goals
The end of the financial year also marks an important milestone for Future Super: we’ve now been in operation for five full financial years.
When we opened Future Super’s doors five years ago, it was the best way I could see (in the very stuck political environment) to help Australia progress on climate change.
I had been involved in political campaigning - running the advocacy group GetUp! and then running for Parliament (alongside one of my co-founders Adam Verwey) in an attempt to prevent Tony Abbott gaining control of both Houses.
But after a decade in and around politics, I came to the realisation that if money rules the world, we could change it’s direction through superannuation.
So we decided to prove customer demand by going out and building Australia’s first completely fossil-fuel free super fund. We set some public, and ambitious goals from the outset, defining the impact we wanted Future Super to have.
Build a business that manages more than $1bn.
Deliver strong investment performance (in the top quartile of our peers).
Spark change in the superannuation industry by making the case for Australia’s big super funds to join us in walking away from fossil fuels.
So, five years later, how have we done?
Future Super manages almost $900 million in superannuation assets - incredibly close to that audacious $1 bn figure we set at the start. We are now one of the fastest growing financial services businesses in the country.
Our investment performance has been exceptionally strong - easily meeting our goal of being in the top quartile. Future Super’s Balanced Impact investment option - the first product we launched - has been in the top 10% of it’s ‘balanced fund’ peers over 5 years with a return of 6.68% p.a. (to June 30, 2020)**.
The superannuation industry is turning away from fossil fuels. Future Super’s exceptional growth and performance is one of many clear market signals to the big super funds. In just the last fortnight we’ve seen two of the biggest funds in the country make Net Zero Emissions and coal removal pledges and another dump some of their most carbon intensive coal stocks.
Globally, over $11 trillion has been moved away from fossil fuels in the last 5 years⌃, and over 140 financial services institutions have embraced divestment in their policies.
Consumer pressure is working. Fossil fuel free investment products are outperforming their peers. The pressure on laggards is increasing.
The tens of thousands of Australians who have chosen to switch to Future Super are at the heart of this movement.
I can’t wait to see what comes next.
CEO & Co-Founder, Future Super * Past performance is not a reliable indicator of future returns. ** ‘SuperRatings Fund Crediting Rate Survey - Balanced (60-76)’, SuperRatings, July 2020. ^ Global Fossil Fuel Divestment and Clean Energy Investment Movement Crosses $11 Trillion Milestone, 350.org, 9 September 2019.