Balanced, Growth, Defensive: What’s in a name?

No matter what it is you buy, consumers are urged to read the label. But when it comes to the labelling of super fund investment options, the labels themselves are confusing.

There is a lack of consistency in the naming of investment options by super funds and the risk categories they are slotted into by research groups who rate them and track their performance.

There is also a lack of clarity about what is a growth asset and what is a defensive asset.

Most funds, but not all, use the terms Balanced, Growth or Defensive in their labels as clues to the investments they hold and the level of risk and potential rewards. But with no clear definition of what these terms mean, funds and their marketing departments have gone rogue.

Ignore the label, look at the ingredients

SuperGuide reviewed the labels used by funds in Chant West’s survey of 151 super investment options. This is the raw material Chant West works with to categorise investment options for its regular super performance league tables. 

Here’s a table of the most popular labels for the 151 options, the amount they hold in growth assets (mostly shares), the number of investment options with this label and the percentage of the total 151 options reviewed.