Do you know where your money is?

This is sponsored content from Morgans Wollongong.

You know what your values and ethics are, but do you know how your superannuation is invested and whether it lines up with the things that are important to you?

Are you a Vegan who inadvertently owns shares in a chicken slaughterhouse? Or maybe you're an avid environmentalist who unknowingly derives investment income from fossil fuels?

Making the choice to understand how your superannuation is invested is paramount to achieving financial literacy and allows you to decide whether your superannuation investments align with your values and ethics.

Ethics are inherently subjective and hence there are some 'technical challenges' in the decision making process. Many ethical investment funds use the screening process to determine what is and isn't acceptable to them. This process, depending on what type of 'screen' is used, may mean that a substantial portion of ASX100 companies are excluded as investment options for one reason or another.

When a negative screen is used this means that companies, industries or even countries involved in specific activities such as fossil fuels, tobacco, gambling, pornography, animal testing and more are excluded from the fund.

There is a common misconception about where your money goes when you purchase shares in a company on the ASX. You are not giving money to that company. The share market is a secondary market where investors exchange ownership with each other.

The shares will still exist whether you choose not to buy them or not, they will just belong to another investor who deems that company to be an acceptable investment.

With this in mind, simply choosing not to buy from a company, or a whole range of companies that are considered to be unethical, may not affect the desired change you imagine it will.

A positive screen selects companies delivering products and services that have a positive impact on society and the environment.

In truth, we need to not only be ethical investors, but ethical consumers as well. A company is only lucrative if there is a demand for what it supplies.

Our advice is to be selective and individual in your investment choices, seek funds based on both qualitative criteria such as ethical and social impact as well as traditional quantitative measures such as rate of return, risk and liquidity.

Don't sacrifice one for the other and choose transparency above all so you know where your money is. Seek products and investments that align with your risk tolerance, investment timeframe and personal circumstance as well as your personal ethos.

Call Morgans Wollongong on 4227 3022, for a free, no obligation chat about your superannuation and how we can tailor your investments to suit your individual needs.

Mention this article and receive a comprehensive superannuation comparison review half price.

Total minimum value $1,100, you pay $550.

This is sponsored content from Morgans Wollongong.