Traditionally, many arguments have been put forward to suggest that responsible investments cannot consistently outperform standard investments.
Some common misconceptions are…
- Responsible investment managers are so restricted in their choice of investments that they’re exposed to higher volatility and greater risk
- Responsible investment portfolios have a bias towards certain industry sectors – this narrows the scope for diversification
- Addressing social, environmental and corporate governance concerns increases costs for companies and decreases productivity
- However, the average performance of responsible investment funds demonstrate that the above concerns do not impact on their ability to deliver strong financial returns
RECENT FUND PERFORMANCE IN AUSTRALIA
According to research conducted by Corporate Monitor, the average responsible investor in Australia is getting better returns for almost all periods from one to seven years in the three major investment categories offering responsible investment products.
Responsible vs. Mainstream Share Funds*
| CATEGORY | 1 YEAR | 3 YEARS | 5 YEARS | 7 YEARS |
| Australian Share Funds | ||||
| Average RI Fund (28) | 15.09 | -7.50 | 5.14 | 9.95 |
| Average Mainstream Fund | 11.56 | -8.05 | 3.70 | 8.75 |
| S&P/ASX 300 Acc’m | 13.05 | -8.05 | 4.49 | 9.70 |
| AMP SRI Median (10) (before fees) | 13.60 | -7.02 | 5.64 | N/A |
| Overseas Funds | ||||
| Average RI Fund (14) | 11.41 | -9.36 | 2.77 | 7.97 |
| Average Mainstream Fund | 6.76 | -12.33 | -2.52 | 0.63 |
| MSCI World ex Australia Index $A | 5.50 | -11.30 | -2.00 | 1.20 |
| Balanced Growth Funds | ||||
| Average RI Fund (6) | 8.45 | -4.37 | 3.63 | 6.67 |
| Average Mainstream Fund | 9.83 | -3.23 | 2.63 | 5.08 |
* Source: Morningstar, Fund Manager data. Returns to June 2010 (net of management fees) % p.a. Number of funds in each responsible investment category is shown in brackets.
RESPONSIBLE INVESTMENT PERFORMANCE RESEARCH
RIAA commissions an annual responsible investment benchmark report which contains performance results. To view these reports, please click here.
PERFORMANCE OF CERTIFIED FUND MANAGERS
View a list of fund managers that have been certified by RIAA. For more information, simply click on the name of the fund manager you are interested in and you will be able to view the past performance of their certified products.
