compare superannuation investment options
Just choosing a super fund that you like isn’t enough. You also need to compare the different investment options of each to find one that suits your appetite for risk and growth. Thankfully, most super funds offer options that align with the types shown below, so you can compare options between funds more easily.
From high-growth focused options, to more conservative options, and even those that focus on environmentally sustainable investments — there’s an investment option to suit your current needs and objectives that can help fund the retirement lifestyle you deserve. All investments carry some risk. So it's important to understand your risk appetite. Check out our risk profiler tool to get a better understanding of your appetite for risk.
Conservative investment options are generally about keeping your money safe, with a focus on earning a modest return. Most of your money is invested in ‘defensive’ assets like debt and cash, usually with some exposure to shares, property and infrastructure.
Conservative options are generally expected to earn lower returns but can also be more stable than balanced options in the short term.
Balanced investment options aim to balance exposure to risk with a targeted return. They use diversification (investing in a mix of lower and higher risk assets) to aim for stronger medium to long-term performance. This strategy can help them weather the normal short-term ups and downs of investment markets.
To accept employer SG contributions a default super fund must be MySuper authorised. This aims to ensure members are invested in a simple, cost-effective balanced option if they don't make an investment choice when they join. At HESTA our MySuper option is called Balanced Growth, and it's where most of our members are invested.
Higher risk assets could include shares, private equity, property and infrastructure, while lower-risk assets could include debt and cash investments.
Indexed balanced growth options
Indexed investment options focus on achieving investment returns at a rate that matches index returns — that is, the average growth rate of the market. Investments can be a mix of defensive or lower-risk assets with a focus on medium to long-term growth.
These investment options have risen in popularity in recent years as communities become more aware of sustainability issues such as climate change and corporate responsibility. They usually prioritise assets that meet environmental, social and governance requirements, and screen out assets that don't meet them. This can mean they're invested in a mix of low and higher-risk assets. Sustainable options generally focus on medium to longer-term growth.
High growth options
High growth options focus on growing your super balance as fast as possible, often by investing more of your super in higher-risk growth assets. This can include assets like shares, property and private equity.
These options aim to achieve strong long-term growth, and are likely to experience ups and downs in the short term.
Choose your own investment portfolio
Some super funds, including HESTA, also allow you to create your own asset investment mix. This doesn’t mean you have to choose each company or asset individually — it lets you choose what proportion of your super is invested into each asset class.
For example, at HESTA, our Your Choice investment options are:
- Cash and Term Deposits
- Diversified Bonds
- Property and Infrastructure
- International Shares
- Australian Shares.
You can choose what percentage of your super is invested in each of these assets and tailor your mix for your own desired balance of risk and return.
For more information on each of these options (or any of the asset mixes above), check out our investment choices guide.
investment performance at HESTA
The graph below shows our super performance based on net return for the investment option selected and an initial investment of $1,000.