Money

Knowing Your Super Investment Options

We’ve all heard of super and why it’s important, but many of us don’t actually realise how much choice we actually have when it comes to our super. Not only can we choose where it goes (in most cases), but we can also choose how we want it invested (and that matters a lot)! Typically when you open a new super account you’ll be provided with a whole range of options in regards to your time frame, tolerance to risk and desired asset classes. 

Some super funds even provide a life-stage style option which automatically changes asset allocations as you mature. However, most companies will offer you three core investment options, which suit the vast majority of Australians. These investment options will typically be labelled Growth, Balanced and Conservative, but every fund will have a slightly different system and variety of investment options.

It’s good to have an idea of the different options available to you, as many funds and employers will automatically put you into a balanced portfolio by default, and that might not be the best option for you and your financial goals.

Growth

A growth portfolio is designed for people with a long-term investment horizon, who are prepared to weather the ups and downs of the market over time. This fund is generally focused on growth assets like Australian and international equities, property, infrastructure and sometimes even asset classes like private equity and credit. You’ll need to be prepared for a higher level of volatility as a growth investor, and you’ll need to be patient over the short-term.

FairVine’s growth portfolio is broken down as follows:

– 40% Australian shares 

– 35% International shares 

– 5% Australian listed property 

– 10% Australian fixed interest 

– 5% International fixed interest

– 5% Cash

Balanced

A balanced portfolio is one of the most popular investment options in Australia, although not necessarily by choice. When we start a new job and don’t provide our employers with the details for our super fund, they are required to open up an account on our behalf, and the default portfolio is typically a balanced one. A balanced fund is designed for investors looking for medium to long-term growth, and it generally has a higher proportion of growth assets (like Australian shares and property) than a conservative portfolio has. 

FairVine’s balanced portfolio is broken down as follows:

– 35% Australian shares 

– 30% International shares 

– 5% Australian listed property 

– 10% Australian fixed interest 

– 10% International fixed interest 

– 10% Cash

Conservative 

A conservative portfolio is typically designed for investors with a shorter time frame, who are more focused on stability, rather than growth. This option generally smoothes out volatility by investing in a higher proportion of fixed interest and cash products, and investing less in the Australian and international share markets. This is an option people may consider as they draw closer to retirement, or if they are concerned about how they’d cope with a fall in the value of their investments.

As an Australian with a super account, it’s important to know where it is, what you’re invested in, the insurance cover you have and the fees you’re paying. Your super could well and truly become your biggest asset as you approach retirement, so nurture it with care as you go through life. 

Don’t ever forget that your super is your money!

Kate Campbell is the Founder of How To Money (HTM). Kate started HTM to help young Australians start talking about personal finance, and share the resources she finds along her financial education journey. Kate started her own journey a few years back and now works in the finance services industry.

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FairVine

FairVine is a super fund designed for Australian women. Currently, superannuation is not delivering results for women, who typically retire with almost half the super of men. We’re looking to level the playing field and close the gender wealth gap.

At FairVine, we empower women to take control of their financial present and future. We provide practical solutions. We inspire, motivate and encourage women to make changes to their financial situation.

FairVine listens to what women want. If you’d like to know more, please get in touch. We'd love to hear from you!