Choose how your super grows.
Your super fund invests your money on your behalf, so it can grow over time. Most funds let you decide how your money’s invested – or you can leave it in the option your fund chooses for you. Most funds allow you to change your super investment options online.
The way you invest influences how your super grows.
What happens if you don’t make an investment choice
If you don’t choose, your super fund puts your money into its MySuper option – the fund’s standard starting point for members.
MySuper is a simple, low-cost, and made to suit most people. You can stay in this option as long as you want – and there’s nothing wrong with that.
Super funds usually offer two styles of MySuper options:
Diversified
The fund spreads your money across a mix of assets – like shares, property, bonds and cash – and keeps that mix steady as you move through life.
Lifecycle
Like diversified MySuper options, the fund spreads your money across a mix of assets, but has a higher proportion invested in growth assets when you’re younger – like shares and property – then gradually shifts your money towards steadier assets such as bonds and cash as you get older. This helps reduce the risk near retirement.
In both cases, the fund handles the work for you, so your money keeps working even if you don’t make changes yourself.
What if you decide to invest in something different
Most super funds let you choose how your money is invested – and there’s no shortage of choice. Most funds also allow you to change your super investment options online.
Super funds group most investment options into three main types, which makes them easier to understand. Learn more about types of assets, and the importance of diversification.
1. Single asset class
These options invest in just one type of asset. Common examples include:
- Shares: invest in Australian or international listed companies. They can grow over time, but move up and down more in the short term.
- Property or infrastructure: invest in things 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 give steadier results.
- Cash: keep money in bank deposits. Low risk, but returns are smaller.
That means your balance can fluctuate in value more than it would if it were spread across different types.
2. Diversified
Diversified options spread your money across a range of asset classes to balance risk and return.
They’re often named for how much growth or risk they aim for. For example:
- Growth: invests mostly in higher-risk assets like shares and property. Targets stronger, long-term returns but can rise and fall more.
- Balanced: invests in a mix of both growth and defensive assets, aiming for steady returns.
- Conservative: invests more in lower-risk assets like bonds and cash, offering more stability but smaller gains.
Each mix comes with its own level of risk and projected long-term return. If you have many years before retirement, a growth option might suit you. If you’re getting closer to retirement, a balanced or conservative option might help protect what you’ve built.
3. Special focus
Some investment options have a theme or focus. They might invest in certain areas, avoid others, or follow specific principles.
- Ethical or ESG options: ESG investing is when a fund considers sustainability (including environmental, social and governance factors) to inform their investment strategy. The may specifically target certain industries or investments, or may specifically exclude certain industries or investments. . Learn more about ESG investing.
- Geographic or sector options: focus on a particular region or industry, like Asia or technology.
These can be single-asset or diversified options, depending on how they’re built. They can match your values and interests – but always check their 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.
Different fund management styles
Super funds don’t all manage your money the same way. The style they use can affect your returns, the risks you take, and the fees you pay.
Super funds generally use one of two approaches when managing your money – active or passive. Both aim to grow your balance, but they work differently.
Active management
In an actively managed fund, professional fund managers decide where to invest your money. They research companies, follow market trends, and make changes to try to earn higher returns than the average market.
This approach can do well when markets rise, but it often costs more because it involves extra research and trading.
Passive management
Passive superannuation funds, also called index superannuation funds, aim to match, not beat, the performance of a market index – like the ASX 200. This index tracks the 200 biggest companies listed on the Australian Securities Exchange.
This approach usually has lower fees and less trading, but your returns rise and fall with the market itself.
Different ways to buy investments
Super funds also invest in a mix of listed and unlisted assets. This mix helps balance flexibility and long-term growth.
Listed assets
Listed assets include assets traded publicly, such as shares in a company, or interests in a registered managed investment scheme, that are listed on a securities exchange (such as the ASX). Because they’re easy to buy and sell, their 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, and the asset values may not be as transparent as listed assets.
Some people choose to be more conservative with their investments as they approach retirement to reduce the risk of their balance going down. Others choose to keep their investments in growth options seeking higher returns. There is no one correct approach.
Use our superannuation calculator
Change the investment option in the drop-down and compare the estimated super balance.
What else to know
There’s more to super investing than choosing a fund or option. The information below can help you dig a little deeper and feel confident about your 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 smooth out risk and returns. Find out how diversification works and why it’s one of the most effective ways to manage risk 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 designed for you once you reach retirement age or meet certain conditions. Find out when and how you can access your super in getting your super.
Pablo's super investment strategy
Pablo, 40, wants 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.
Pablo 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 chooses a growth option as he hopes the good years will outweigh the bad over the next 20.