Lower returns in ethical super are about to be more obvious

Ethical superannuation fund options may rank poorly against traditional rivals in new performance tests of their returns and fees because they avoid investing in dirty yet lucrative industries and often cost members more because of their small size, the Australian Retirement Trust has warned.

The head of sustainable investments at the $240 billion super fund, Nicole Bradford, said there would need to be “an ongoing dialogue” with how this testing worked in practice, after the Albanese government controversially announced it was expanding the regime this year from default “MySuper” funds to alternatives selected by customers.