TOL - 1st Jun, 2026
"There are always opportunities": Ausbil on how sustainable investing can beat the market
Ausbil's Nicholas Condoleon says the right sustainable investing strategy can still outperform, even if it can't always follow the crowd.
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Please note this interview was filmed on Friday 8 May 2026.
It's no secret the Australian stock market is dominated by miners and other resources companies. For those looking to take a more sustainable approach to their portfolio, it often means choosing to exclude some of the more attractive opportunities on the ASX.
But it doesn't necessarily have to mean you also leave returns on the table, says Nicholas Condoleon, Portfolio Manager for the Ausbil Active Sustainable Equity Fund.
The fund has outperformed its benchmark over the period since inception (31 January 2018) to 31 March 2026, and the fund has recently launched a listed version, the Ausbil Active Sustainable Equity Fund - Active ETF (ASX: ASUS).
But it's a strategy that isn't without its challenges, given it cannot invest in companies that don't meet Ausbil's sustainability criteria. "We exclude companies with material exposure to controversial activities, including alcohol, gambling and fossil fuels, in accordance with our Controversial Activities Exclusion Policy," says Condoleon.
Here, Condoleon explains how Ausbil looks to overcome some of the self-imposed limitations of a sustainable investing approach, especially at times where the profitable trades are in stocks that are off limits to the fund, as we've seen recently with the oil crisis.
Outsmarting the benchmark
How do you drive outperformance when you're not allowed to touch 25% of the companies in the ASX 200?
That's the challenge facing the Ausbil Active Sustainable Equity Fund and one that Condoleon is highly cognisant of.
"As soon as you start excluding stocks and big sectors of the market, then from time to time, you will get returns which move away from the benchmark," he says.
"But what we've found over the past eight and a half years is that those deviations from the benchmark tend to be quite short term. And when we recover, we actually recover very strongly."
There are a few aspects Condoleon believes drive Ausbil's performance and set it apart from other investors. One is the fundamental approach it takes to the market.
"We have a top down, bottom up process," he says. "We look at the macro economic environment firstly before we go down and drill into stocks and sectors and then portfolio construction."
"So it's a very disciplined process and that top-down element really differentiates us from our competitors."
Another is its almost 30 years of active management experience, and its reputation as an ESG investor. The fund has a three-person in-house ESG team, and Ausbil's Head of ESG Måns Carlsson has won an Order of Australia for his work on modern slavery.
Finally, it's Ausbil's active relationships and engagement with companies, which Condoleon says helps them take a proactive role in sustainability and drive policy advocacy.
"What's really important to us is engagement," he says. "We meet with companies on a very regular basis. In fact, we do about 200 meetings a year with companies and that engagement is really important."
Finding the counter-balances
One of 2026's best trades has been oil, and it's a trade Ausbil's Sustainable Equity Fund is unable to take part in. But a big part of driving returns as a sustainable strategy is understanding that other opportunities will always present themselves.
There are still many areas of the ASX 200 that Ausbil is able to invest in, even amongst the mining and resources sector.
"We're not excluded from the materials or the resources space more broadly," says Condoleon. "We're looking at commodities associated with the energy transition - critical minerals and some of the green metals, as they're called. Lithium, rare earths and copper for example. These are all essential ingredients to help the world move to renewables."
"So we've got big exposures in those parts of the market and that can counter any offsets that we're seeing in the fossil fuel parts of the market."
Ultimately, it's about drawing on the firm's long-term strategy and maintaining an agile view of markets, even at times when non-sustainable stocks are driving the returns.
"When they're flavour of the month for investors that's quite challenging for us. But we just stick to our process," he says.
"We look for the opportunities and there are always opportunities."
Managed Fund
Ausbil Active Sustainable Equity
Australian Shares
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Tom is a Senior Investment Writer and Presenter at Livewire Markets, having worked as a writer and editor for 10 years, specialising in investing and personal finance.
He has previously worked at Finder, FourFourTwo and Man Of Many covering everything from film to football.
He has a Masters in Media Production and a Bachelor's in Journalism.
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This material is issued by Ausbil Investment Management Limited ABN 26 076 316 473, AFSL 229722 (Ausbil) as at 8 May 2026 and is subject to change. The material is not intended to provide you with financial product advice. It does not take into consideration the investment objectives, financial situation or needs of any person. For this reason, you should, before acting on this material, obtain professional advice from a licensed financial adviser and read the relevant Product Disclosure Statement which is available at www.ausbil.com.au and the target market determination which is available at www.ausbil.com.au/invest-with-us/design-and-distribution-obligations. Past performance is not a reliable indicator of future performance. Any reference to past performance is for illustrative purposes only and should not be relied upon on. Ausbil, its officers, directors and affiliates do not guarantee the performance of, a particular rate of return for, the repayment of capital of, the payment of distribution or income of, or any particular taxation consequences for investing with or in any Ausbil product or strategy. The performance of any strategy or product depends on the performance of the underlying investment which may rise or fall and can result in both capital gains and loss.
Any references to particular securities or sectors are for illustrative purposes only. It is not a recommendation in relation to any named securities or sectors. The material may contain forward looking statements which are not based solely on historical facts but are based on our view or expectations about future events and results. Where we use words such as but are not limited to ‘believe’, ’anticipate’, ‘expect’, ‘project’, ‘estimate’, ‘likely’, ‘intend’, ‘could’, ‘target’, ‘plan’, we are making a forecast or denote a forward-looking statement. These statements are held at the date of the material and are subject to change. Forecast results may differ materially from results or returns ultimately achieved. The views expressed are the personal opinion of the author, subject to change (without notice) and do not necessarily reflect the views of Ausbil. This information should not be relied upon as a recommendation or investment advice and is not intended to predict the performance of any investment or market. The actual results may differ materially from those expressed or implied in the material. Ausbil gives no representation or warranty (express or implied) as to the completeness or reliability of any forward-looking statements. Such forward looking statements should not be considered as advice or a recommendation and has such should not be relied upon.
To the extent permitted by law, no liability is accepted by Ausbil, its officers or directors or any affiliates of Ausbil for any loss or damage as a result of any reliance on this information. While efforts have been made to ensure the information is correct, no warranty of accuracy or reliability is given, and no responsibility is accepted for errors or omissions. Any opinions expressed are those of Ausbil as of the date noted on the material and are subject to change without notice.
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Tom is a Senior Investment Writer and Presenter at Livewire Markets, having worked as a writer and editor for 10 years, specialising in investing and personal finance. He has previously worked at Finder, FourFourTwo and Man Of Many covering...
Expertise
Tom is a Senior Investment Writer and Presenter at Livewire Markets, having worked as a writer and editor for 10 years, specialising in investing and personal finance. He has previously worked at Finder, FourFourTwo and Man Of Many covering...
Expertise
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