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.
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.