Your Money is Actively Invested 📈
When you put money into super, your fund invests it across a range of different asset classes. The goal is to grow your savings over the long term. Most funds offer several pre-mixed investment options, allowing you to choose a strategy that aligns with your comfort level for risk.
This guide provides general information about common investment options and is not personal financial advice.
What are Asset Classes?
Before diving into the options, it helps to know what your money is invested in. The main asset classes are:
- Growth Assets: These have the potential for higher returns but also come with higher risk of short-term losses. Examples include Australian and international shares (stocks), and property.
- Defensive Assets: These are generally lower risk and provide more stable, predictable returns. Examples include cash (term deposits) and fixed interest (bonds).
Each investment option is simply a different blend of these growth and defensive assets.
The Most Common Investment Options
Here’s a breakdown of the typical pre-mixed options you’ll find in most super funds:
1. High Growth / Aggressive:
- Asset Mix: Typically 90-100% in growth assets like shares.
- Who is it for? Generally suited for people with a very long time horizon (e.g., 20+ years until retirement) who are comfortable with significant ups and downs in their balance for the chance of higher long-term returns.
2. Growth / Assertive:
- Asset Mix: Around 85% in growth assets.
- Who is it for? Still geared towards long-term growth, this option is also for those who are comfortable with a high level of volatility.
3. Balanced:
- Asset Mix: Usually around 70% in growth assets and 30% in defensive assets. This is the default option for most funds (often called a MySuper product).
- Who is it for? It’s designed to be a middle-of-the-road option that suits a wide range of people by balancing long-term growth potential with some cushioning against market downturns.
4. Conservative / Stable:
- Asset Mix: Typically has a higher allocation to defensive assets, with only around 30% in growth assets.
- Who is it for? Generally suited for people approaching retirement who want to protect their capital and are less focused on high growth.
Most funds also allow you to build your own mix by choosing individual asset classes if you prefer a more hands-on approach.