When sharemarkets fall and people start panicking, it’s easy to think the best solution is to sell your investments or swap out of your super fund investment option. But it’s a decision that could cost you dearly.
Choosing an investment option (Investment choice)
Choosing an investment option in your super fund is an important decision, though it’s one that many Australians neglect. Around 80% of Australians with superannuation accounts have their money invested in the default option, which is where you’re placed if you don’t choose an investment option.
Default options are usually ‘balanced’ or ‘growth’ investments and normally have around 60%-80% of their funds invested in growth assets such as shares and property. These options are designed as an appropriate investment strategy for a large number of members across the many years they will be saving for their retirement.
However, your fund’s default option may not be best for your particular circumstances and risk profile. It’s important to understand that different types of investments have different levels of risk. In general, the higher potential investment return, the higher the risk, and vice versa.
It’s important to regularly assess your investment option over time as your circumstances change and to make a switch if necessary. For example, you may want to choose a different investment option in retirement if you’re receiving a pension.
See also the SuperGuide section on SMSF investment.
To learn about the key aspects of choosing a super investment option, see the following SuperGuide articles:
Set out below are all SuperGuide articles that relate to Choosing an investment option (Investment choice).
What are lifecycle super funds, and how do they perform?
Another strong performance from global sharemarkets in November has set up younger members of lifecycle funds for bumper returns in the 2019 calendar year.
Monthly super fund performance Reckoner: Monthly returns for 5 investment categories
In our reckoner below you can view the median monthly investment returns for 5 superannuation investment options. We’re grateful to Chant West for providing the statistics that power the reckoner.
Super fund performance: Monthly returns to February 2020
Widespread sell-offs in the share and property markets meant super funds dropped significantly in February. According to super research house Chant West the median growth fund (61-80% in growth assets) fell 3.1% in February and has dropped a further 10.5% in March to date.
Can you exclude fossil fuels from your superannuation?
We look at whether you can rid your super of fossil fuels, and how a renewable energy portfolio might affect your nest egg.
Investing your super savings? What lifecycle funds can teach you
When it comes to investing your super, working out what mix of assets to use is tricky. But new research shows there are important issues to remember when selecting your mix of investment assets.
Video: Choosing a super investment option
In this video interview Mano Mohankumar, Senior investment research manager at Chant West, shares some insights on how super funds performed in 2019, the outlook for 2020, and what to consider when choosing a super investment option.
Super and pension funds with the lowest fees
Low fees went even lower in 2019, as revealed in the top 10 super and pension funds with the lowest fees.
How investing in infrastructure boosts your super account
If you’re a member of a big super fund, chances are you are a part-owner in an airport, a pipeline or a major shipping port. So why have super funds embraced infrastructure and what’s in it for you as a super fund member?
How to review your super fund
Is your super fund a star performer or a lemon? Follow our 6-step guide to assess if your super fund is right for you.
Do you know what your super fund is invested in?
The investment assets of many super funds are far from transparent – both publicly and for fund members. It’s a situation the government has tried to remedy over a number of years, but from 31 December 2020 all that’s changing.
5-step guide to deciding if it’s time to change your investment option
If you believe your super fund is not performing as well as you had hoped, or as well as other super funds, what can you do? Here’s our 5-step guide to help you assess whether your super fund’s investment performance is staying with the pack – or lagging the field.
3 questions to ask when choosing a responsible investment option
Although you might want your super fund to produce a good investment return every year, many fund members also want their money invested responsibly and in line with their personal values. To help you ensure your super account is being invested the way you want, we have prepared a simple guide to what responsible investment means when it comes to your super fund.
What are the buy/sell spreads charged by my super fund?
Buy/sell spread fees are something we’re all likely to see a lot more of thanks to ASIC’s new disclosure rules for annual fund member statements. So just what are these mysterious charges and how do they work?
How to change your investment option: 6 points to check before you switch
If you’re unhappy with how your super savings have grown, it’s worth considering whether you’re in the right investment option in your super fund. To help you work through the process of making an investment option switch, check out our simple explainer.