9 April 2024
Making an investment choice
We recognise that members have a variety of investment objectives and views about risk. This is why AustralianSuper offers range of investment options that have different levels of potential return and volatility. So how do you make a choice? To help you make a decision about the investment options that best suit you and your financial goals, we’ve pulled together a summary of the key things to consider.
What type of investor are you?
There are three main things to consider when making a choice:
- How long you will hold your investment
- How hands-on you want to be when managing your super
- How much risk you’re comfortable with
Your time horizon is how long you have to grow your account balance. A longer-term time horizon enables you to invest in an option that has more growth potential and ride out day-to-day market ups and downs. Having a shorter-term time horizon may mean that you want to protect your existing savings. Each investment has a recommended minimum investment timeframe. This can be used as a guide to what investment options may be suitable for your investment time horizon.
How hands-on you want to be refers to how much direct control you want over your investments. If you wanted to be more hands-off, our diversified PreMixed options are professionally managed by the AustralianSuper investment team to provide access to a broad range of assets. The PreMixed options enable you to choose an option that meets your risk profile and let us manage the investment for you. The Do it yourself (DIY Mix) options enable you to be a bit more hands-on and choose exposure to specific asset classes that are actively managed by the AustralianSuper investment team. If you wanted to have more control, the Member Direct option allows you to choose shares in the S&P/ASX 300 Index, Exchange Traded Funds, Listed Investment Companies or term deposits.
How much investment risk you’re willing to take is based on how comfortable you are in riding through the ups-and-downs of investment markets. Investment risk often refers to the potential for investments to lose money. Risk and reward can be directly connected. Investments that have higher growth potential like shares often come with more risk, while more conservative investments like cash may have lower growth potential.
AustralianSuper investment options
Matching the type of investor you are to the investment objectives of each option can help you make your investment choice. The table below shows the investment objectives, recommended minimum investment time frames and risk profile of each option.
| PreMixed options | Investment objective | Recommended minimum investment timeframe | Short term risk profile (less than 5 years): Risk of losing money in the short term |
Long term risk profile (more than 20 years): Risk of not keeping up with inflation |
|---|---|---|---|---|
| High Growth | To beat CPI by more than 4.5% pa over the medium to longer term. To beat the median growth fund over the medium to longer term. |
At least 12 years | High | Low |
| Balanced | To beat CPI by more than 4% pa over the medium to longer term. To beat the median growth fund over the medium to longer term. |
At least 10 years | High | Low |
| Socially Aware | To beat CPI by more than 4% pa over the medium to longer term. To beat the median growth fund over the medium to longer term. |
At least 10 years | High | Low |
| Indexed Diversified | To achieve a return of CPI + 3% pa over the medium to longer term. | At least 10 years | High | Low to medium |
| Conservative Balanced | To beat CPI by more than 2.5% pa over the medium term. To beat the median conservative balanced fund over the medium term. |
At least 7 years | Medium to high | Low |
| Stable | To beat CPI by more than 1.5% pa over the medium term. To beat the median capital stable fund over the medium term. |
At least 5 years | Medium | Low to medium |
| DIY Mix options | Investment objective | Recommended minimum investment timeframe | Short term risk profile (less than 5 years): Risk of losing money in the short term |
Long term risk profile (more than 20 years): Risk of not keeping up with inflation |
| Australian Shares | To beat the S&P/ASX 200 Accumulation Index (adjusted for franking credits) over the medium to long term.* | At least 12 years | Very high | Low to medium |
| International Shares | To beat the MSCI All Country World ex Australia Index (unhedged) over the medium to long term.* | At least 12 years | Very high | Low to medium |
| Diversified Fixed Interest | To beat a composite of Australian and international fixed interest indices over the short to medium term.* | At least 3 years | Medium | Very high |
| Cash | To outperform the return of the Bloomberg AusBond Bank Bill Index over one year.* | At least 1 year | Very low | Very high |
| * Index level returns, adjusted for implied superannuation tax (where applicable). | ||||
| Member Direct | The investment objective, recommended minimum investment time frame and risk profile depend on your specific investment choices. | |||
Comparing investment objectives
Each investment option has an objective that helps you compare the potential performance for each of the options. These investment objectives include: outperform inflation, a peer benchmark or a market benchmark and can be ranked from lower to higher potential performance.
How risk impacts your investment option
To achieve each of the investment objectives, the AustralianSuper investment team will invest in assets that have the potential to meet the objectives. This often means investing in assets that have risk, with risk being the possibility of losing value in the short term. To compensate investors for the risk taken, riskier assets have higher return potential over the long term. The investment team manages each option to achieve the investment objectives while considering the level of risk taken. Combining the investment objectives and risk helps us graph the options based on their return and risk profile. When investing, the options that have the potential for higher returns over the long term often have additional risk of losing value in the short term.
Investment objectives and risk profile comparison graph
The graph shows the comparison of each investment option based on the relative performance objective and risk profile. The investment objective is based on the inflation outperformance target (PreMixed options) or the return potential of the option (DIY Mix options). The risk profile is the standard deviation of the option for the 10 years to 31 December 2023.
We’re here to help
AustralianSuper offers 11 investment choices to suit the different needs of members. If you need help making a decision , we can help. Members have access to a range of advice choices, from simple over the phone advice through to comprehensive advice that’s tailored to your specific circumstances.
To learn more about your advice options
Additional reading:
Choosing the right super option
Understanding what your super is invested in
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