Update on performance for FY 2023

We finished the 2023 financial year with positive returns across all Future Super investment options. Find out what each option returned, what impacted those returns and more news about our investments. 

| Investment option | Annual returns at 30 July 2023 | | ---------------------- | ---------------------------------- | | Balanced Index | 10.50% | | Balanced Impact | 8.54% | | Renewables Plus Growth | 9.72% |

The big picture: what impacted returns in FY23

As a Future Super member, your super is invested all over the world. It’s invested in shares, bonds, property, infrastructure and more. That means there are a lot of factors that influence the performance of your super. 

Let’s start by looking back - the 2022 financial year presented extremely challenging market conditions, with nearly all asset classes down. As a result, last year we experienced negative returns across all investment options. One significant factor in that result was fossil fuel prices spiking following Russia’s invasion of Ukraine. Future Super did not benefit from the spike in fossil fuel prices because we screen out fossil fuel companies. 

If 2022’s returns had some doubting whether ethical funds could deliver, then 2023’s strong returns should provide a powerful counterpoint. 

In fact, this year Future Super’s screening strategy gave us an edge. Screening out direct and indirect exposure to fossil fuels put our equities investments in a particularly strong position. 

For example, we screen out many of the big banks, locally and internationally, because they fund fossil fuel projects. Financial year performance for the banking sector remained below broad index returns.

Additionally, our investment strategy in equities (that’s stocks traded on share markets) benefited from a bias towards tech. The tech sector globally continues to deliver growth. 

What’s next? 

We do anticipate challenging conditions throughout FY24. Interest rate rises mean it’s a difficult environment to be investing in property and infrastructure because it’s harder for the companies building those projects to borrow money. More broadly, interest rate rises, increased geopolitical tensions and inflation contribute to uncertain economic conditions all over the world. 

Of course, these challenges do not mean that we waver on our ethical mandate and approach to screening. We retain the conviction that over the long term, as governments and companies meet net zero commitments, economies will continue to allocate resources to renewables and emissions reduction. We believe that companies and assets benefitting from this macro theme offer strong long term investment opportunities for super funds.

Here’s some more 2023 news about Future Super’s investments…

• Construction of Nightingale Wurru wurru biik precinct in Brunswick, Melbourne is nearly complete. Management expects the building to be complete in February 2024. The building has been designed sustainably and will include affordable housing. Future Super members in Renewables Plus Growth and Balanced Impact have exposure to this investment. 

• Cosgrove Solar Farm, which Future Super invests in through Green Squares Energy, has been built and management expects the solar farm to start generating energy in late November 2023. The Future Super Renewables Plus Growth option is invested in Green Squares Energy. 

• The Macquarie GIG Renewable Energy Fund 2, which Future Super invests in across Renewables Plus Growth and Balanced Impact, recently signed an agreement to acquire a 50% stake in European renewable energy developer Enel Green Power Hellas. Enel is one of the world’s top 5 largest developers in the field of renewable energy, in terms of installed capacity, with 59 plants totalling 482 MW of installed capacity powered by wind, solar and hydro as well as six solar projects under construction for an overall capacity of 84 MW.

• Conscious Investment Management (CIM)’s The Impact Fund helped Traditional Owners buy back Country in south-west Queensland. The Kullilli people are returning to Country after acquiring the pastoral lease to Thargomindah Station at auction. The purchase was facilitated by The Impact Fund and the land will be managed by Kullilli Traditional Owners with a carbon farming project already approved by the Clean Energy Regulator for the site. Members in Renewables Plus Growth and Balanced Impact have exposure to The Impact Fund. 

• The Balanced Index, Renewables Plus Growth and Balanced Growth Pension investment options were certified by the Responsible Investment Association of Australasia (RIAA). The certification confirms a product has implemented an investment style and process that systematically takes into account environmental, social, governance or ethical considerations, and this investment process reliability has been verified by an external party.

Disclaimer:

This statement contains general information only and does not take into account any person’s financial objectives, situation or needs. We recommend that you seek professional financial advice tailored to your own personal circumstances.  When considering financial returns, past performance is not a reliable indicator of future performance. Superannuation is a long-term investment and it is important to consider investment returns over a long time horizon, rather than short term fluctuations. The risk profile of the Fund’s investment strategy is based on the Standard Risk Measure. You can read more about the Risks of Super on page 12 of our Additional Information Booklet.