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Your super investment options affect how your super grows over time.
How super investing works
Your super fund invests your money to help it grow over time.
When your employer pays into your super, the fund invests that money across different assets, like shares, property, bonds and cash based on your investment choice. You don’t need to manage these investments yourself. Your fund does this for you.
Your investment returns – positive or negative – affect your super balance.
Choosing the right super investment options can make a difference to how your super grows over the long term.
What happens if you don’t choose a super investment option?
If you don’t choose a super investment option, your fund puts your money into its MySuper option.
MySuper is a simple, low-cost option designed to suit most people. You can stay in this option long-term, or you can change at any time.
Super funds typically offer 2 categories of MySuper investment options:
Diversified
The fund invests your money across a mix of assets, like shares, property, bonds and cash. That mix is steady over time.
Lifecycle
The fund invests your money across a mix of assets, and the mix is automatically adjusted as you age. When you're younger, it puts more into growth assets like shares and property. As you get older, it shifts more into steadier assets like bonds and cash. This helps reduce the risk as you near retirement.
In both options, the fund manages your investments even if you don’t make changes yourself.
Investment platforms have become increasingly popular with superannuation investors. However, ASIC is warning superannuation trustees to address stark and persistent failures to protect retirement savings, including gaps in the monitoring of harmful advice fee deductions, unusual fees and investment patterns, and high-risk superannuation switching activity. Learn more.
What super investment options are available?
Most super funds let you choose how you invest your super. You can usually change your investment options online or over the phone.
Super investment options are grouped into 3 main types, which makes them easier to understand. Learn more about types of assets, and the importance of diversification.
Single asset class
These options invest in one type of asset. Common examples include:
- Shares: invest in Australian or international companies. They can grow over time but move up and down more in the short term.
- Property or infrastructure: invest in assets like shopping centres, office buildings, roads and airports.
- Bonds or fixed interest: lend money to governments or companies for a set return. They’re usually lower risk and more stable.
- Cash: invest in bank deposits. Low risk, but lower returns.
Holding your money in one asset type means less diversification.
Diversified
Diversified options spread your money across a mix of asset classes to balance risk and return.
They’re often named by how much risk they aim to take. For example:
- Growth: invests mostly in growth assets, such as shares and property which are generally higher-risk investments. Aims for higher, long-term returns but can rise and fall more in the short term.
- Balanced: invests in a mix of growth and defensive assets. Aims for steady returns over time.
- Conservative: invests more in defensive assets, such as bonds and cash, which are generally lower-risk investments. Offers more stability but lower returns.
When thinking about what to invest your super in, think about how long you have until retirement and how much investment risk you're comfortable with. If you have many years before retirement, a growth option may suit you. If you’re closer to retirement, a balanced or conservative option may help protect your super.
Special focus
Some options focus on specific themes, industries or values. For example:
- Ethical or ESG options: consider environmental, social and governance factors when investing. They may include or exclude certain industries. Learn more about ESG investing.
- Geographic or sector options: focus on a particular region or industry, like Asia or technology.
These options may be single-asset or diversified.
They can match your values and interests but may carry higher risk or less diversification. Always check performance and risk before deciding.
High-pressure sales tactics are putting your super savings at risk. Be on red alert for phone calls, click bait advertising and promises of unrealistic returns to encourage you to put your super into risky investments. Stop, think carefully, and check the claims first.
Read the investor alert and our tips on how to protect your money.
Active and passive management
Super funds use different ways to manage your investments. This can affect your returns, risks and fees over time.
Active management
In an actively managed option, investment professionals choose where to invest your money. They research companies, follow market trends, and adjust investments.
Their goal is to deliver better returns than the overall market. This approach can perform well when markets rise, but it often involves higher fees.
Passive management
Passive options aim to match the performance of a market index, rather than outperform it.
A market index tracks how a group of investments is performing. For example, the Australian Securities Exchange (ASX) 200 measures the performance of 200 of the largest companies in Australia.
These options usually have lower fees and less trading. Returns rise and fall with the market.
Listed and unlisted assets in super
Super funds invest in a mix of listed and unlisted assets to balance flexibility and long-term growth.
Listed assets
Listed assets are traded on public markets. This includes shares in a company or units in a managed investment scheme listed on an exchange (like the ASX).
Because they’re easy to buy and sell, prices can change quickly.
Unlisted assets
Unlisted assets include direct property, private companies, and infrastructure projects. They aren’t traded on public markets, so they can take longer to sell. Prices also update less often than listed assets, making it less transparent.
Some people choose to be more conservative with their investments as they approach retirement to reduce the risk of their balance going down. Others stay in growth options to seek higher returns. There's no single approach that suits everyone.
What to check before changing your super investment option
There’s more to super investing than choosing a fund or option. The information below can help you understand your options and plan next steps.
Understanding investment risk
Every investment carries some level of risk. The right amount depends on your goals and how you feel about short-term ups and downs. Learn how to find your comfort level in develop an investing plan.
Why diversification matters
Spreading your money across different types of investments can help manage risk and smooth out returns. Learn how diversification works and why it matters in diversification.
Learning about different investments
Want to understand more about what you can invest in – like shares, property or cash? Explore the basics in choose your investments.
How super fits in
Super is a long-term way to grow your retirement savings. See how it works and how it supports you later in life in what is superannuation.
When you can use your super
You can’t access your super straight away – it’s for when you retire or meet certain conditions. Find out when and how you can access your super in getting your super.