Super investment options

Striking the right balance

With super, it's easy to set and forget. But choosing a suitable investment option will have a major impact on how your super performs. So see what your fund and others have to offer.

How super funds invest your money

Super funds invest your money to grow your nest egg over your working life. Most super funds let you choose from a range of investment options, depending on how much investment risk you are willing to take. For example, a conservative option will offer lower risk but lower returns over the long term. A higher growth option will have higher risk and experience more volatile returns over the short term, but will usually achieve higher returns over the long term.

If you are at least 10 years from retirement, you might consider choosing a higher growth option as you have time to ride out the ups and downs in the market. As you get closer to retirement, you might decide to reduce your level of risk, as preserving your capital will become more important.

You can find out about your fund's investment options by visiting its website or by giving them a call. You will also find detailed information in the fund's product disclosure statement (PDS). The PDS will explain the:

  • strategy behind each investment option
  • investment returns it aims for (and possibly historical return data)
  • risks involved.

Most funds have a 'default' investment option. This is usually a balanced investment option that has a mix of defensive and growth assets. A fund's default investment option is also its MySuper option.


MySuper accounts offer:

  • a single diversified investment option or life-stage investment option
  • lower fees (and restrictions on the type of fees you can be charged)
  • simple features so you don't pay for services you don't need.

See MySuper for more details.

Types of investment options

Your fund's various investment options may contain the same types of assets, but at different weightings, to suit the level of risk you are comfortable with.

Pre-mixed investment options


Invests around 85% in shares or property. Aims for higher average returns over the long term. This also means higher losses in bad years than those you would experience with lower risk options. You may also be able to invest in a 'high growth' option with 100% in shares and property.


Invests around 70% in shares or property, and the rest in fixed interest and cash. Aims for reasonable returns, but less than growth funds to reduce risk of losses in bad years. Those losses usually occur less frequently than in the growth option. You may also be able to invest in a 'moderate' option with around 50% in shares and property.


Invests around 30% in shares and property with the majority in fixed interest and cash. Aims to reduce the risk of loss and therefore accepts a lower return over the long term. There is less chance of having a bad year than in the balanced or growth options.


Invests 100% in deposits with Australian deposit-taking institutions or in a 'capital guaranteed' life insurance policy. This option aims to guarantee your capital and accumulated earnings cannot be reduced by losses on investments.


This option aims to screen out companies that don't meet environmental, social and governance standards determined by an investment manager. A pre-mixed investment option that follows an ethical strategy could sit anywhere along the risk spectrum - from high growth to conservative.

Choose your own investment options

Some super funds let you customise your account by adjusting weightings to the different asset types or pick direct investments, within limits. For example, you may favour the outlook for international shares over Australian ones, and ask your fund to rebalance your portfolio or change the way future contributions are invested.

Your fund may also allow you to pick direct investments, so you can run your account like a self-managed super fund - but without all the paperwork.

For some funds these direct investments include:

Picking a suitable investment option

Most people work for 30 to 40 years and live for another 25 to 30 years after retiring. You want your super to grow and keep pace with inflation during this time.

For this reason, a growth or balanced strategy may suit a long-term investor who won't be spending their super for more than 10 years.

A higher risk strategy may deliver higher returns, but the risk is that there will be losses in bad years. Over 30 to 40 years, it's likely that any growth strategy will lose money in at least 4 to 6 of those years. However, there are likely to be more ups than downs.

Historically, over any 20-year period, a growth or balanced strategy has given better returns than more conservative investment options. You must decide if the likely rewards are worth the risk.

Think before you choose an investment strategy

When choosing your investment strategy, consider:

  • your age
  • how comfortable you are with investment risk
  • how long before you will be able to access your funds
  • your retirement goals.

If you won't be accessing your super for 5 or more years, your focus should be on what it's likely to be worth in the future. It doesn't matter what it is worth from day to day, in the same way that the value of your home doesn't matter from day to day. It only matters when you sell your house, or, in this case, take out your super as a lump sum or start drawing regular payments from it.

A lower risk, lower return strategy (e.g. capital guaranteed or capital stable) could suit people who need greater security and less risk. This strategy may suit if you're retiring and intend to withdraw all your super in less than 5 years, and you want to be sure how much money you'll have.

Case study: Adam's super investment strategy

Man discussing his superannuation options on the phoneAdam, 40, would like to retire when he is 60. To make this happen, he knows he has to build a nest egg. He has some shares and is paying off an investment property with his sister.

Adam wants a super fund that offers relatively high returns over the long term. He is willing to tolerate the risk of negative returns in bad years. He decides on a growth fund as he hopes that over the next 20 years the good years will outweigh the bad.

Picking the right investment option within super is important whether you're 16 or 65. Your investment strategy will influence how much money you'll have to retire on and how you live your life in your retirement years.

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Last updated: 27 Mar 2018