Want to take a more active approach with how your super’s invested? We address how to find the right investment options for you.
Super is likely to be one of the largest investments you'll have over your lifetime so understanding the various investment options available, can help you make informed decisions.
Choosing an investment strategy that works for you can also impact the growth and performance of your super which is important when it comes to your retirement income.
In this article, we look at the different investment options available through super including some of their benefits as well as things to consider.
MySuper is offered by many super funds and is ideal for those who want a hands-off approach where you leave your super investments to the experts to manage for you.
One of the key features of MySuper investment options is their diversified nature. These options generally invest across a mix of asset classes, including shares, property, fixed income, and cash, to spread risk and maximise returns over the long-term.
Additionally, how your assets are allocated can be based on a predetermined investment strategy that takes into account factors like your age, how comfortable you are with risk, and retirement goals.
Note: it’s important to be aware that while these options provide a diversified investment strategy, they are not personalised to you. This means they may not meet your specific needs including things like how much risk you’re willing to take on.
Pre-mixed investment options offer a greater degree of customisation compared to MySuper options as you can select a strategy that aligns more with your risk tolerance and investment goals.
These investment options are ready-made investment strategies provided by your super fund. They generally consist of a blend of different asset classes such as shares, property, fixed income, and cash, in varying proportions.
The mix of asset classes are also tailored to different risk profiles, ranging from growth-oriented options which have a greater focus on growth assets like shares and property, to more conservative options which focus on preserving your money and have lower volatility.
Here are some examples of pre-mixed investment options:
If you’re looking for more control over your investment portfolio, choosing your own investment options enables you to select asset classes based on your preference.
One of the main advantages of this is you can tailor your portfolio so it aligns with your specific investment goals and beliefs. For example, if you have a strong interest in certain industries or regions, you can invest more in those areas.
It's important to note that choosing your own investment options requires a higher level of knowledge and expertise in financial markets.
You'll need to actively monitor and manage your investments to ensure they remain aligned with your objectives and comfort with risk. This may involve conducting research, analysing market trends, and rebalancing your portfolio to maintain your preferred asset allocation.
Selecting individual investments within your super fund may involve higher costs compared to pre-mixed options, as you could be required to pay brokerage fees or other transaction costs.
If you're unsure about the complexities of self-directed investing, seeking advice from a licensed financial adviser can help you make informed decisions.
It’s important to make sure your investment options align to your risk preference. For example, investing in shares would be considered a high-risk option compared to cash given the extreme volatility. So, if potential losses in the short-term makes you feel uneasy, you may want to take a conservative approach.
It’s important to determine when you plan to access your super savings as the longer your money is invested, the less impact short-term volatility will have on your retirement savings. This means if you have a long period until retirement, you may be able to take on more risk to achieve greater potential returns.
Whether you're aiming to build wealth, retirement income, or achieving specific milestones, selecting the right investment options is essential to delivering these objectives.
Speaking with a financial adviser can help you determine which investment options are most likely to deliver your objectives.
By educating yourself about the various investment options available, and seeking professional advice when needed, you can make more informed decisions that could have a significant impact on your future.
* Based on KPMG Super Insights 2023 Report as at May 2023 https://assets.kpmg.com/content/dam/kpmg/au/pdf/2023/super-insights-2023-report.pdf
The information in this article is current as at November 2024 and may be subject to change.
As one of the largest super providers in Australia,* we're focused on delivering competitive returns, so your money continues to grow. When it comes to support, we go the extra mile—providing general super advice at no additional cost.
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This article has been prepared by NULIS Nominees (Australia) Limited ABN 80 008 515 633 AFSL 236465 (NULIS) as trustee of the MLC Super Fund ABN 70 732 426 024. NULIS is part of the Insignia Financial group of companies comprising Insignia Financial Ltd ABN 49 100 103 722 and its related bodies corporate (‘Insignia Financial Group’). This information may constitute general advice. The information in this article is general in nature and does not take into account your personal objectives, financial situation or needs. You should consider obtaining independent advice before making any financial decisions based on this information. It is recommended that you consider the relevant Product Disclosure Statement (PDS) and Target Market Determination (TMD) before you make any decisions about your superannuation. You can obtain the latest copy of the PDS (or other disclosure documents) and TMD by calling us on 132 652 or by searching for the applicable product at mlc.com.au. You should not rely on this article to determine your personal tax obligations. Please consult a registered tax agent for this purpose. Opinions constitute our judgement at the time of issue. The case study examples (if any) provided in this article have been included for illustrative purposes only and should not be relied upon for decision making. Subject to terms implied by law and which cannot be excluded, neither NULIS nor any member of the Insignia Financial Group accept responsibility for any loss or liability incurred by you in respect of any error, omission or misrepresentation in the information in this communication.
