Frequently asked questions - Investments

Does UniSuper invest in tobacco?


No. We’ve always excluded tobacco from our socially responsible investment options. In addition, in 2011, we decided to screen tobacco companies from our mainstream investment portfolio. We made this decision on the basis that:

  • tobacco stocks were a small part of our total portfolio and had delivered minimal outperformance, and
  • the tobacco industry faces an uncertain regulatory future and has potential long-tail liabilities associated with it.

For these reasons, we believe the long-term risks of owning tobacco stocks outweigh the benefits.

How does the rising or falling Australian dollar impact my investments?


We invest across various international markets on behalf of our members.

International investments are denominated in their local currency, for example, US dollars. When the Australian dollar rises (strengthens) against another currency, this has the impact of decreasing the Australian dollar value of the international investment. Conversely, when the Australian dollar falls (weakens) against another currency, this has the impact of increasing the Australian dollar value of the international investment.

For example:

  • A parcel of US shares is valued at US$150
  • The exchange rate between the Australian dollar and the US dollar is A$1.00=US$1.05
  • The Australian dollar value of the US shares is (150/1.05) = A$142.86
  • The Australian dollar then strengthens against the US dollar so the exchange rate is A$1.00=US$1.10
  • The Australian dollar value of the US shares is now (150/1.10) = A$136.36

As you can see, a rising Australian dollar (from US$1.05 to US$1.10 in the above example), has the impact of decreasing the Australian dollar value of the investment in US shares by A$6.50 (that is, from A$142.86 to A$136.36).

Learn more about currency management.

How does UniSuper engage the directors and management of companies UniSuper invests in if you suspect they’re doing something wrong?


As an institutional investor, we are an active share owner and endeavour to drive appropriate change in corporate behaviour over time to protect and enhance the value of our members’ assets. This is a theme central to our investment practices and why we exercise our proxy votes and directly engage with companies where we have concerns around particular practices.

This means we meet with company directors and senior management, where appropriate, to discuss our concerns and determine how the company is going to manage various matters going forward. In addition, our external investment managers often engage with companies we're invested in. We're also a member of the Australian Council of Superannuation Investors (ACSI). ACSI engages (on behalf of its members) with a large number of Australian companies each year on a range of environmental, social and governance matters.

Learn more about responsible investing.

How does UniSuper manage foreign currency exposure within its portfolios?


Fluctuating exchange rates between the Australian dollar and other global currencies can change the Australian-dollar value of our international investments.

Learn more about currency management.

How has UniSuper’s Balanced option performed relative to peers?


To see how our Balanced Option has performed, visit Investment options, performance and holdings.

What factors does UniSuper take into account when choosing external investment managers?


We take into account a wide range of factors when selecting external investment managers to manage your retirement savings.

For more information, see External investment managers.

What’s UniSuper’s approach to divestment?


We have a legal and fiduciary obligation to our members to aim to maximise their financial outcomes within the constraints applicable to each investment option.

Investment and divestment decisions are based on judgements on the financial sustainability of an asset. However, this decision-making process involves a robust investment analysis, and takes into account the financial implications of a range of factors including environmental and social considerations. For example, we’ve decided not to invest in companies considered manufacturers of cigarettes and tobacco products for any of our investment options due to the financial risks those businesses face.

We understand some members would like options that specifically screen out certain sectors. The Sustainable Balanced and Sustainable High Growth options screen out companies with material exposure to fossil fuel exploration and production, alcohol, gambling, weapons and tobacco.

Because it only invests in companies with a specific focus, the Global Environmental Opportunities option doesn’t have exposure to companies involved in tobacco, alcohol, gambling, weapons or fossil fuel exploration and production.

The screening parameters were decided after reviewing industry practices and norms and consulting various parties including knowledgeable members who are passionate about these issues.

See the ‘Responsible investing’ section of our website or read our Chief Investment Officer’s commentary on UniSuper's divestment approach for more detailed information.

Why are there differences between UniSuper’s Cash option returns and retail deposit rates?


Our published Cash option returns are historical returns for a period net of fund taxes. Published bank rates are typically forward-looking annual rates gross of tax. Comparing historical returns with prospective rates net and gross of tax can make return comparison misleading.

For more information, see Cash.

Why does UniSuper manage some funds in-house rather than all via external managers?


We have a competitive advantage in managing funds internally due to our scale, skills and growth. This provides us with information and access advantages relative to other institutions.

It’s important to note the portfolios we manage internally don’t compete directly in the space of our external managers.

As a member you benefit from:

  • Compelling economics, as managing portfolios in-house lowers management fees, brokerage and other intermediary fees
  • Scalability, which frees up capacity in allocating to ‘special’ managers who are typically constrained by their funds under management
  • Closer 'hands-on' after-tax performance management, for example, we aim to capture franking credits for the Australian equities portfolios as they’re valuable to super funds, and
  • Improved market intelligence.