Choosing the right super option

Picking the right investment option is important. Here’s some things to consider first, and a few tips.

What type of investor are you?

How you choose to invest your money will depend largely on the type of investor you are. When it comes to super, there are three key considerations in choosing the right investment for you:

  1. How long you’re investing for.
  2. How hands-on you want to be when managing your super.
  3. How much investment risk you're comfortable with.

1. How long do you want to invest for?

Your investment timeframe is how long you plan to invest your super savings before you retire, as well as how long you want your savings to last once you do retire.

Even if you don’t know when you'll retire, thinking about your investment timeframe can help you choose an option that matches your goals.

2. How hands-on do you want to be?

Choosing the right investment can impact how much your savings grow and how long they last. Before making your choice, you need to know how much direct control you want over your investments – or how 'hands-on' you want to be.

You can choose from three different investment options, each with a different hands-on level:

3. How much risk are you comfortable with?

Different investment timeframes and options come with different risk levels. An investment’s risk level largely depends on how long you invest in it.

  • Within a short timeframe (five years or less), the main risk to your investment is short-term fluctuations that could reduce your savings. 
  • Investing over a longer period (20 years or more) means that your investments will probably have time to ride out short-term ups and downs. Your main risk over the longer term is keeping up with wage inflation. 

Different types of assets also have different levels of risk. Consider how you might offset this risk by selecting diverse investments.

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Managing risk over the short and long term

Your investment time-frame is a factor when considering volatility risk. While Cash has been steady over the last 20 years, it's also grown less than assets like shares. If your savings are growing too slowly, they might not keep up with the rising costs of living. 

Australian shares grew strongly over the same period of time, but if you look at shorter time frames like the Global Financial Crisis in 2008/09 or the COVID-19 downturn in 2020, you can see that shares can be risky as well as rewarding. The chart shows that $100,000 invested in the Australian Shares option over the 20 years to 31 December 2023 would have grown to $617,246, while the same investment in the Cash option would have grown to $187,449. The chart also shows that a diversified PreMixed option like the Balanced option enabled members to grow their account balance over this period while offering some protection during market downturns. This can provide a smoother journey for an investor, with $100,000 invested in the Balanced option growing to $464,148 for the 20 years to 31 December 2023.

The chart shows that $100,000 invested in the Australian Shares option over the 20 years to 31 December 2023 would have grown to $617,246, while the same investment in the Cash option would have grown to $187,449.

Source: AustralianSuper.

Investment returns aren’t guaranteed. Past performance isn’t a reliable indicator of future returns. AustralianSuper investment returns are based on crediting rates. For super (accumulation) products, crediting rates are returns less investment fees and costs and transaction costs, the percentage-based administration fee that is deducted from returns from 1 April 2020 to 2 September 2022 and taxes. Returns don't include all administration and other fees and costs that are deducted from account balances. Returns from equivalent options of the ARF and STA super funds are used for periods before 1 July 2006.

Our top five tips for managing risk

  1. Mixing it up can help

    Investing in a mix of investments (diversification) can help protect your investments against market ups and downs. Spreading your investments across a variety of companies, industries and regions in different asset classes can help reduce the risk of negative returns.

    Diversification is particularly important to consider if you’re planning to build your own strategy with our DIY Mix options or invest your own super using Member Direct. Our PreMixed options are already diversified and each option has a different mix of assets.

  2. Focus on your long-term needs

    Watching your super balance go up and down can be unsettling. While it can be tempting to change investment options when markets are down, it isn’t always the best approach. Investments that are volatile over short periods of time may have the potential to grow more over longer periods.

  3. It’s normal for markets to change

    Most investments go up and down over time. Market movements can mean the asset allocation of your portfolio moves away from its original strategy and changes your risk level.

    In our PreMixed options, we actively adjust the asset allocation so it reflects our strategy. If you invest in our DIY Mix options or Member Direct, you’ll have to manage this yourself.

  4. Review your strategy

    When your circumstances or objectives change, it’s a good idea to review your strategy to ensure it’s still right for you. For example, you might be nearing retirement and need to access some of your super in the short term.

  5. Consider seeking financial advice

    The best option is the one that suits your investment timeframe, circumstances and goals. A professional financial adviser can help you develop an investment strategy to meet your needs, which could make a big difference to your retirement savings over the long-term.

Investment guide - pdf, 2.9MB

1. Personal financial product advice is provided under the Australian Financial Services Licence held by a third party and not by AustralianSuper Pty Ltd. Some personal advice may attract a fee, which would be outlined before any work is completed and is subject to your agreement. With your approval, the fee for advice relating to your AustralianSuper account may be deducted from your AustralianSuper account subject to eligibility criteria.
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