Verve Super returns 9.9% for the financial year
This financial year Verve Super delivered returns to members of 9.9%, with sustainable investment screening providing a performance boost.
The returns position Verve Super as a sustainable investment leader, with SuperRatings estimating that the median balanced super fund would return 8.8% for the financial year, up from 8.5% last year.
Verve Super employs a negative screening approach – screening out fossil fuel companies as well as gambling, tobacco and weapons companies.
Fossil fuel performance drags
This year, the screening approach has helped bolster returns because screening out those companies means we’ve been able to invest more in growth areas like technology, artificial intelligence, health and renewable energy.
The fossil fuel intensive energy sector in Australia (including companies like Woodside and Santos) underperformed the ASX300 this financial year, with the sector returning -1.0% while the ASX300 returned 11.9%.
This continues a long trend. Last year, the Institute for Energy Economics and Financial Analysis released research showing that fossil fuel companies have been dragging down share markets for as long as 10 years (to the end of calendar year 2023).
Benefitting from the AI boom
US-based tech company Nvidia was one of the darlings of the artificial intelligence trend, with its share price booming throughout the year. Verve Super’s screening approach means that we allocate more than the benchmark to growth sectors like tech and companies like Nvidia, helping members benefit from the strong performance of the technology sector.
“Our returns are built on a foundation of responsible investing, avoiding fossil fuel companies means we have more space to embrace other, growing sectors like tech, AI, health and renewable energy,” Sharon Davis, Executive Director of Investments at Verve Super’s parent company Future Group explains.
“Locally, the fossil fuel sector was not a strong performer this year, while globally the technology sector, benefitting from the AI boom, performed exceptionally well.”