Investment options

Investment choice (or member investment choice) is a feature of a fund through which a member has a say over where his super fund invests his super money.

As a member of a super fund, you generally can choose from a selection of investment portfolios, such as balanced option, growth option, conservative option or cash option. Some super funds give you the option to invest in specific asset class options, such as a property option or Australian shares option.

A balanced investment option can have more than half of a fund’s assets in shares and the rest in property, fixed interest and cash. A balanced option often has a similar meaning as a growth option, but is generally more conservative than growth. You need to check the underlying assets rather than rely on terminology

Depending on the asset allocation, a growth investment option can sometimes be called the balanced investment option. True growth options generally have from 80% to 100% of assets in growth-style assets such as shares and property. A balanced option generally has from 60% to 80% in growth-style assets.

A conservative investment option is ordinarily, a low-risk investment option – a significant portion of the investments in cash and fixed interest investments.

The default investment option is the option a fund chooses for those members who fail to choose an investment option. The default option is usually based on the age and risk profile of the average member of a super fund.