Christian Super recently introduced an Ethical Index Shares investment option which is available to all of our members. While some superannuation funds offer indexed investment options (which you may have heard about if you follow Scott Pape, the ‘Barefoot Investor’), Christian Super is the first and only super fund in Australia to offer an ethically screened indexed investment option.
Index investing explained
Index investing involves creating a portfolio of shares that will automatically follow what’s happening in the stock market. For example, the ASX 200 Index includes the top 200 companies listed on the Australian Stock Exchange. Instead of purchasing shares in all 200 companies individually, index investing allows you to purchase units in one Exchange Traded Fund (ETF) which automatically matches the ASX 200.
As a result, index investing is also known as passive investing. The alternative is active investing, where fund managers buy shares in individual companies, to construct a portfolio that they believe will outperform the relevant index. There are benefits to each approach. One key benefit of index investing is that investment fees are generally much lower than actively managed options.
The basics about our Ethical Index Shares investment option
Our Ethical Index Shares investment option is made up of 50% Australian shares and 50% international shares. These shares are matched to an Australian Shares Index (ASX 200) and an International Shares Index (MSCI World) but exclude companies that do not meet our ethical screens. You can find a full list of the shares are in our Ethical Index Shares option on the Investment Holdings page of our website.
The Ethical Index Shares option has an annual investment fee of 0.31% and an indirect cost ratio of 0.02%. If you had an account balance of $50,000 which was all invested in Ethical Index Shares, your approximate annual fees would be $365 comprised of:
- A fixed administration fee of $65 ($1.25 per week)
- Plus a variable administration fee of $135 (0.27% x $50,000),
- Plus a combined investment fee and indirect cost ratio of $165 (i.e. 0.33% x $50,000)
Note that the investment fee and indirect cost ratio are deducted before you receive your net investment returns, while the administration fees are deducted from your account balance each month.
Our Investment Guide contains further details about the Ethical Index Shares option, as well as our other investment options:
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The financial year to date investment returns for our Ethical Index Shares option are available on the Returns page of our website.
Could this option be right for you?
The Ethical Index Shares option is available for members who are building their super as well as pension members. It may be a suitable investment option for all or part of your account balance if you have a long investment timeframe of 10 years or more, and you are comfortable with a very high-risk investment option – negative returns are expected every 6 years in 20 and single asset class investments do not offer the diversification benefits of other investment options.
To discuss your specific circumstances and to find out if this option is right for you, we recommend speaking to a financial advisor. You can also chat to our Member Care Team about the suitability of this option by calling 1300 360 907, 9:00am – 6:00pm (AEDT) Monday to Friday or emailing us at firstname.lastname@example.org .
Please note that the information contained in this post is a summary and general in nature. It does not take into account the personal objectives, financial situation or specific needs of individual members. We strongly recommend that you refer to our Product Disclosure Statement (PDS) and Investment Guide for the full terms and conditions, and obtain professional financial advice to determine the appropriateness of the information, taking into account your own personal circumstances.