Your super is your money, so it pays to understand how it's invested.

Choosing how to invest your super is a personal decision that comes down to your specific circumstances and appetite for taking risks.

In investment terms, risk refers to the chance that the actual return will be different to the expected return. As a long-term investment, your super will be exposed to many market cycles and different levels of risk.

If you don’t plan on accessing your super any time soon, putting your money into an investment option that is exposed to growth assets could be a great way to maximise your super’s potential.

But if you’re planning to access your super in the next few years, you might not have the time to ride out the market volatility. In that case, a defensive investment strategy might help you better protect your money.

Building blocks

It’s important to spread your money across different types of assets which is called diversification. Diversification can reduce investment risk as asset classes tend to perform differently at different points in the economic cycle.

All of our diversified investment options are invested across a range of asset classes with the current and target mix for each option available.

Below is some additional information on the main asset classes that we invest in.
 

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Cash investments include a range of short and medium-term interest-bearing investments, such as term deposits, bank bills and treasury notes. For the diversified investment options, the Cash asset class can also include corporate debt and asset-backed securities which aim to add value while substantially retaining the low-risk characteristics of more traditional cash investments.


Typically the least risky of all asset classes, cash is often chosen by investors who want to access their money in the short to medium term. However, while the risk of negative returns from cash investments is much lower than for other asset classes, expected returns are also lower, particularly in a low interest rate environment. The buying power of your money may also be reduced as it may not keep up with inflation.


The value of a cash investment will fluctuate due to a number of factors, but primarily with the rise and fall in interest rates.


All of our diversified investment options include an allocation to cash, and members can also invest exclusively in cash by selecting our Cash single asset class option.

A fixed income investment is a loan to a government, semi-government authority or large corporation in exchange for regular interest payments, plus repayment of the principal amount at maturity.

Interest is paid to investors over the life of the investment, usually at a fixed rate. However, for some bonds, the interest payments and/or principal are adjusted for the rate of inflation. These are known as ‘inflation-linked bonds’ and they are designed to help protect investors from inflation.

While fixed income investments such as bonds are usually less volatile than many other investments like shares, they may also have a lower expected return over the long term.

It is also important to note that fixed income investments are not without risk and do not provide a fixed rate of return like a term deposit. The fact that bonds are traded in a marketplace with buyers and sellers means they are exposed to price movements, and the possibility exists for low or negative returns from time to time.

Bond values are driven by prevailing interest rates and expected interest rate movements. In general, when interest rates rise, the market value of bonds tends to fall, and when interest rates fall, bond values tend to rise. This can have a significant impact on performance.

All of our diversified investment options include fixed income investments, other than High Growth, and we also offer Australian Fixed Interest and International Fixed Interest single asset class options.

Our international fixed income investments will typically be 100% hedged, which means they are protected against the impact of currency fluctuations on investment returns.


Equities (shares) are a portion or share of a company that can be bought or sold on an exchange. Equities allow investors to access both large and small listed companies across a range of industries in Australia and overseas (both developed and emerging markets).

The return investors receive from investing in equities includes income in the form of dividend payments, as well as capital gains (and losses) from changes in the value of the underlying shares, and for international equities, currency movements.

Long-term returns from equity investments tend to be higher than those achieved from property, fixed income and cash investments. But in the short term, their performance is more volatile and returns can be negative, making them a higher risk investment.

Various factors like consumer sentiment, commodity prices and company performance can all have an impact on a company’s share price.

All of our diversified investment options include Australian and international equity investments, and we also offer the below single asset class options:

  • Australian Equities – passively managed by an index-replicating manager. 
  • International Equities - managed by an index-replicating manager - note that this option is unhedged, and as such, will fluctuate both as a result of changes in the value of the underlying shares and currency movements.
  • Australian Equities Socially Responsible Investment (SRI) – this option invests in companies that meet specific criteria with respect to environmental, social and governance considerations. Read more about the investment selection process and criteria.

View the list of our top shareholdings.

Note that our Australian and international equities asset classes can also include a small exposure to unlisted companies which are less liquid than listed companies.

Property investments include office buildings, shopping centres and industrial estates, residential property such as apartment buildings and retirement villages, and property businesses. Investors can access property investments either directly or indirectly by purchasing units in a property trust (unlisted or listed) and the property investments may be in Australia or global.

Direct and unlisted property investment returns reflect a combination of rental income and capital growth, and are dependent on a range of economic factors such as interest rates and employment, as well as the location and quality of properties.

Listed property investments (often known as Real Estate Investment Trusts or REITs) are investments in their own right and like shares, their returns also reflect general market sentiment. Returns from listed property securities are therefore different (and more volatile) than the returns earned from owning direct or unlisted property investments. 

Property investments are subject to a moderate to high degree of risk and are typically most suitable for long- term investors seeking high growth over the medium to long term, who are willing to accept fluctuations in returns and the possibility of negative returns over the short term.

At Aware Super we invest in a combination of unlisted and listed property assets which are traded on stock exchanges globally.

All of our diversified investment options include an allocation to both Australian and global property investments, and we also offer a single asset class Property option.

Infrastructure assets are the utilities and facilities that provide essential services to communities. Examples include utilities (electricity, gas, water and communications), power (including renewables), transport (airports, seaports, toll roads and rail), social infrastructure assets (hospitals, education facilities and community infrastructure such as a convention centre) and agriculture (including land and water assets, as well as timber assets).

New infrastructure sub-sectors which exhibit similar features to traditional infrastructure investments, for example land title registries, have also developed over time.

Infrastructure investments can be accessed either directly or indirectly by acquiring an interest in an unlisted or listed infrastructure investment. 

Because they often require substantial upfront investment, unlisted infrastructure investments typically have high barriers to entry, but generally offer investors a steady income stream, potential for capital growth over the long term, and lower volatility than other growth assets such as equities. However, there are risks. For example, changes to government regulations, usage rates, and interest rates may affect their value.

By contrast, listed infrastructure investments are investments in their own right and like shares, their returns also reflect general market sentiment. Returns from listed infrastructure securities are therefore different (and more volatile) than the returns from owning direct or unlisted infrastructure investments.

All of our diversified investment options include infrastructure investments which reflect a combination of direct and indirect unlisted assets.

Credit income covers a range of alternative debt investments. Like fixed income, credit income investments involve a loan to a borrower in exchange for regular interest payments, plus repayment of the principal amount at maturity. However, compared to traditional fixed income investments, the loans are typically to borrowers with a lower credit rating and, as a result, may command a higher rate of return to compensate the investor for the risk of default.

Credit income investments include loans to a range of companies in Australia and globally across a variety of industries including infrastructure, real estate and various corporate sectors.

All of our diversified investment options include an allocation to credit income investments.

Private equity includes investments in Australian and overseas companies that are not listed on a stock exchange. Such companies can include large established companies needing investment and expertise to support future growth plans, as well as smaller, rapidly growing businesses.

The private equity market is less efficient and less regulated than listed equity markets. This creates opportunities for skilled managers to add value. However, private equity investments are typically illiquid and high risk, and so are typically best suited to investors with a medium to long-term horizon.

Our High Growth, Growth, Balanced Growth and Diversified Socially Responsible Investment investment options include an allocation to private equity investments.

Liquid alternatives include a range of non-traditional strategies such as real return strategies and hedge funds. Unlike traditional fund managers which are often restricted to investing in a single asset class (e.g. Australian equities), these managers have a wider range of allowable investments and are able to utilise a combination of equities, bonds, currencies, commodities and other liquid asset classes. They can make investments in these asset classes via physical exposures or, more typically, via derivatives (refer to the Member Booklet Supplement: Investments, for additional details on the fund’s use of derivatives).

The managers we partner with to manage this asset class are selected for their potential to provide strong diversification, or to deliver returns above CPI (or an official cash rate) by dynamically moving around their exposure to different asset classes.

We differentiate between growth-oriented and more defensively-oriented liquid alternatives strategies. The growth-oriented strategies are focused on generating strong capital growth but can also carry a high level of risk. By contrast, the defensively-oriented strategies aim to reduce total portfolio risk by providing positive returns when equity markets experience large negative returns.

Guidelines for measuring investment risk

The super industry has developed guidelines for measuring investment risk. The purpose is to have a consistent approach to risk measurement so comparisons of different investment options are more valid and meaningful.

Read the industry guidance paper.

The Standard Risk Measure or SRM allows you to compare investment options that are expected to deliver a similar number of negative annual returns over a 20-year period within and across funds.

As shown in the table below, the risk measures range from 1 (being the lowest risk) to 7 (being the highest risk).

Standard Risk Measure
Risk band Risk label Estimated number of years of negative annual returns over any 20 year period
1 Very low Less than 0.5
2 Low 0.5 to less than 1
3 Low to medium 1 to less than 2
4 Medium 2 to less than 3
5 Medium to high 3 to less than 4
6 High 4 to less than 6
7 Very high 6 or greater

What you need to know

The Standard Risk Measure for each of our investment options is based on their long-term strategic asset allocations and forward-looking asset class assumptions.

While the Standard Risk Measure can help you compare investment options, it’s important to keep in mind that it is not a complete assessment of all forms of investment risk. For example, it doesn't take into account how large a loss might be, or the potential for a positive return to be less than you may require to meet your objectives. In addition, it doesn’t take into account the impact of administration costs and tax on the likelihood of a negative return.

You should still ensure you’re comfortable with the risks and potential losses associated with your chosen investment option/s.

What Standard Risk Measures have been applied to our investment options?

The Standard Risk Measures applied to our investment options are shown in the Member Booklet Supplement: Investments (for accumulation members) and the Member Booklet Transition to Retirement Income Stream or the Member Booklet Retirement Income Stream (for income stream members).

Managing investment volatility

Market volatility and fluctuating returns are a normal part of the investment cycle. While you’ll never be able to eliminate volatility entirely, there are ways to manage it and even make it work in your favour. See our ‘Managing investment volatility’ fact sheet for more information.