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Investment basics

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Understand investment basics

Your super is a long-term investment of your money, and you can decide how it’s invested. Over time, investment values will go up and down. When you invest with other members of a super fund, you might have access to bigger opportunities and lower fees than you would on your own.

Here are some things to know about your super investments:

  • You can choose one (or more investment) options
  • What’s right for you may depend on your age and when you plan to retire
  • Your super is invested across different assets like shares, property and cash.

How do super investments work?

When money goes into your super, it doesn’t just sit there — it’s invested to help it grow. Employers have to pay the 12% super guarantee (SG) to your account, and you can contribute more yourself.[S1] The money is then invested in the default option, an option you’ve chosen, or across several options.

The way your super is invested can affect how much you’ll have in retirement.

Understand your investment options to make the right investment choice.

What is MySuper Lifecycle?

If you don’t choose how to invest your super, it’ll go into our default option called MySuper Lifecycle, where most of our members are invested.

MySuper Lifecycle automatically adjusts your investment mix as you get older. It aims to grow your balance in your earlier years through our High Growth or Growth investment options. As you move closer to retirement, your risk will gradually reduce through Balanced investment options.

If you choose your own investment option, it’s a good idea to review it from time to time.

Setting your investment strategy

Choosing how to invest is about finding the right mix for your goals, age and comfort with risk.

Investment returns are likely to make up around half of your final super balance at retirement. Once you're retired, investment earnings typically account for about 30% of the income drawn from your super in an income stream.

Retirement Income Case study
  • Based on the projection of the lifecycle of a single female member who starts from age 21 and plans to retire at age 67, which represents about 70% of our membership. The projection finishes at age 95.
  • Results are approximated figures of 33% from investment earnings before retirement, 30% from investment earnings through retirement and 37% from contributions, which together make up the income in retirement paid by super.
  • Results are stated in today’s dollars, deflated using Average Weekly Ordinary Time Earnings (AWOTE) at 3.7% p.a. for accumulation projection and using CPI at 2.5% p.a. for pension projection.
  • Salary is based on the average female Aware Super member at age 21, indexed with AWOTE at 3.7% p.a. Their employer only contributes SG at the legislated rate of 12%.
  • Investment returns for accumulation are based on the Aware Super MySuper Life Cycle option, assumed to be CPI + 4% p.a. until age 55, reducing from CPI + 4% p.a. to CPI + 2.75% p.a. between the ages 55-65 (inclusive) and CPI + 2.75% p.a. from age 65 onwards.
  • Investment returns for pension is based on the Conservative Balanced option, assumed to be CPI + 3.25% p.a.
  • Based on 2025/26 income tax rates.
  • Based on March 2025 Aged Pension rates, indexed with Average Weekly Ordinary Time Earnings (AWOTE) at 3.7% p.a.
  • No admin fees and earnings tax are modelled as investment returns are assumed to be net of fees and tax.
  • Insurance premiums during accumulation are assumed to be the average for members at each age with default insurance arrangements, indexed with AWOTE of 3.7% p.a.
  • This example is for illustrative purposes only and is not intended to provide a forecast or guarantee on outcome.

You can choose your investments when you join Aware Super, or online at any time in Member Online. Before deciding on an investment strategy, take the time to think about:

  • when you want to retire
  • how comfortable you are with ups and downs in the market
  • how involved you want to be in managing your super.

Younger members might focus on growth to build their balance. Meanwhile, members approaching retirement may shift to lower-risk options to protect what they’ve built.

Want to expand your investment know-how? Then check out our guide to the basics of investments and explore our investment options.

What happens if you don’t make an investment choice?

If you don’t choose an option, your super will automatically go into MySuper Lifecycle. This means there’s less to manage and you can still grow your balance early and protect it later in life.

Your investment time frame

The time between now and retirement can shape the way you invest. If you’ve got a lot of years ahead, you could focus on growth and ride out the highs and lows of the market . But if you’re closer to retirement, you might focus on protecting the balance you’ve built.

Your investment mix should change over time to suit your needs and lifestyle. You can discover how it works in our investment guide.

Investment options

You can choose how your super is invested or let us manage it for you.

Your options range from ready-made mixes to custom choices built from asset classes. Some options are designed for higher growth (and higher risk), while others are more stable.

Compare our investment options and discover how we invest.

Understand types of asset classes

Asset classes are the building blocks of your investments. They all behave differently and have their own levels of risk and return.

Growth vs defensive assets

Growth assets aim to increase your balance faster, but they can fluctuate more in the short term. Defensive assets are designed to deliver more stable returns, but they tend to do so at a lower rate. You may benefit from a mix of both, depending on your goals and tolerance for risk.

Learn more about understanding asset classes

 

Asset class
Type
Risk level
Example
SharesGrowthHigher riskAustralian and international shares
PropertyGrowthHigher riskCommercial and residential property
Fixed incomeDefensiveLower riskBonds
CashDefensiveLower riskSavings-style investments

Investment returns

Your super earns money through the returns generated by its investments. These returns are reinvested, called compound interest. Over time, compounding can make a big difference to your balance.

Markets can swing quite a bit , and that’s normal. Super is designed as a long-term investment, so short-term movements are less important than the long-term trend.

What are the risks of investing?

All investments involve some risk. Both the market and value of your super will fluctuate over time. The main risks you might experience are short-term falls in value and the risk of not growing enough if returns are too low. Super is a long-term investment, and short-term dips along the way are normal. The key is finding the right balance between growth and stability for your needs.

Risk tolerance

Your risk tolerance is how comfortable you are with seeing your super balance change over time.

Everyone feels differently about investment risk. It all comes down to your personality, financial situation and stage of life. A higher risk tolerance might mean you’re comfortable choosing growth options. While a lower risk tolerance may mean you prefer conservative ones.

Understanding your level of risk can help you decide how to invest within the broader risks of the market.

See your risk measures and understand risk and returns.

 

Watch our on-demand webinar to learn more

Want to deep-dive into investing? Our experts explain how investing through super works.

FAQs about investments

Superannuation is Australia’s retirement savings system. During your working life, your employer makes regular compulsory contributions into your super fund, and you can add extra if you want to.[S1] The fund invests this money to help grow your balance over time.

You generally can’t access your super until you turn 60 and retire, meet a condition of release, or once you turn 65.

Super is invested to grow your retirement savings. Your employer makes compulsory superannuation guarantee contributions into your fund, and you can add extra if you choose.[S1] That money is then invested across different assets like shares, property, bonds and cash.

You can pick your own investment options or let your savings go into the default MySuper Lifecycle.

Yes, you can change your investment option at any time and it’s easy to do in Member Online.

When switching, think about your risk tolerance and when you plan to retire. This can help you make sure your choice aligns with your goals. Avoid changing options just to chase short-term market returns as super is designed for long-term investing.

Growth investments aim to increase your wealth and typically offer higher long-term returns, but they come with more short-term dips and peaks. Shares and property are common growth assets.

Defensive investments focus on protecting the capital you’ve built by providing stability and lower returns with a reduced risk of loss. Some examples include cash and bonds.

The right mix of growth and defensive investments depends on your goals, risk tolerance, and how long you plan to invest.

Get help and advice

We can help. Talk to a super expert at no extra cost.[AD2]
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Where to next?

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[AD2] Members can get advice about their Aware Super accounts at no extra cost, or advice on their broader needs for a fee.

[S1] Before contributing, consider the current annual contribution limits. Exceeding these limits may reduce any tax benefits you could receive. Visit Grow your super for more information.