Thrifting vs. Sustainable Investing: You Can Check the Tag in Thrift Stores, But How Do You Decode a Truly Sustainable Fund?
If you’ve ever browsed your local op shop, you know the thrill of spotting a hidden gem. It could be a vintage jacket or a high-quality brand, plus the bonus of not running into five other people wearing the same outfit. But finding these treasures isn’t always easy. Sometimes, you’ve got to look beyond the surface to assess quality. The same goes for sustainable investments. You're after long-term gems, not just things that sparkle at first but lose their shine upon closer inspection.
So, how can you apply your op shopping skills to finding truly sustainable investments?
Let’s explore:
- Look beyond the surface and check the label
My son, a total Thrifty (thanks, TikTok), has this knack for spotting what looks like just another sweater, only to check the label and—bam!—it’s a designer brand. What a score!
Sustainable investments can be trickier, as it’s not always clear whether something is truly sustainable or just clever marketing. Sustainable investments can take many forms, such as ESG integration, exclusions (screening), thematic investing, stewardship, and impact investing. Each approach has its place, with some resonating more with certain investors than others, but often being used in combination.
To cut through the noise, look for external verification. Most should be certified by RIAA (Responsible Investment Association Australasia), meaning they’ve been audited for both claims and processes. RIAA is also well connected to the industry and regulators.
For more info, check here.
Also, review the fund’s reporting to see if it has the 'Sustainable Plus' certification from RIAA, which tracks performance against specific objectives. The Devon Funds annual sustainability report shows how their funds apply responsible investing strategies, starting on page 10, here. - It’s all about patience
The best op shop finds don’t appear overnight. You’ve got to check back, wait for that perfect piece, and stay alert for hidden value. My son’s mastered the art of patience, while I’m still working on it—but it’s a fun thing to do together!
Similarly, sustainable investing is also about patience. It can sometimes appear more volatile, especially when excluding industries like fossil fuels, tobacco, or firearms. By narrowing the pool of assets, you may end up with a higher concentration in sectors like tech or renewable energy, which can be prone to more fluctuations in the short term. Likewise, you may avoid the volatility of the mining sector (as these companies are usually excluded in sustainable funds). However, sustainable investing is typically focused on long-term growth, often with companies that are better positioned for the future as global priorities shift toward sustainability. - You’re never too sure about that Price Tag
Sustainable funds can be pricier, but this may not always be the case. One of the reasons is the additional research and screening they require. As investors increasingly look for sustainable options, many fund managers are adjusting their strategies to keep fees competitive.
However, at the end of the day, it’s not just about the fees, but about comparing their performance after fees.
There’s also the cost of the footprint you’re leaving behind. For many sustainable investors, they’re willing to pay a little extra, knowing their funds are supporting positive environmental and social impact. It’s similar to a thrifter who visits op shops—not just for the thrill of the bargain, but to reduce their environmental impact by avoiding the purchase of new clothes adding to landfill.
Just like hunting for that precious gem in an op shop, finding truly sustainable options requires looking beyond the surface. While we’ve only scratched the surface here, who knows—sustainable choices may become the norm in the future. Whether it’s thrifting or investing, the key is to choose quality, assess long-term value, and make decisions that align with your values and comfort level.
To find out more please call the following investment advisor for a chat on +64 9 308 1450 (alternate contact below) or send us a message at Contact Us.
Lynette Ball
Investment Advisor
+64 27 569 8694
Information and Disclaimer: This article is for information purposes only. It does not take into account your investment needs or personal circumstances and so is not intended to be viewed as investment or financial advice. Should you require financial advice you should always speak to your Financial Adviser. This article has been prepared from published information and other sources believed to be reliable, accurate and complete at the time of preparation. While every effort has been made to ensure accuracy neither JMI Wealth, nor any person involved in this publication, accept any liability for any errors or omission, nor accepts liability for loss or damage as a result of any reliance on the information presented.
JMI Wealth and Devon Funds Management Limited (Devon) are wholly owned subsidiaries of the Investment Services Group Limited (ISG). JMI Wealth Advisers are distributors and promoters of ISG products.