Making an investment choice

If you want QSuper to manage your investment strategy, you can leave your money in our default investment option, Lifetime.1 However, if you would like more control over your investments, you can make an investment choice.

Here are some things you can do before you decide how to invest your superannuation.

Understand

Before making an investment choice, it's important to understand asset classes and the different types of investment risk. Read the information below to learn the basics of investing in super and compare our different investment options.

Consider your situation

Ask yourself how long you plan for your money to be invested for, and the level of risk you can, or should, take to achieve your goals. You also need to decide how involved you want to be in managing your super.

Get advice

When it comes to choosing the best investment strategy for your needs, getting some professional guidance can help.2 As a QSuper member, you have access to online advice at no additional cost through Member Online.

Take action

If you decide that our default option Lifetime is right for you, you do not need to do anything as we automatically invest your money for you. Make a different investment choice by logging into Member Online.

Understanding asset classes

Asset classes, also known as investment groups, are the building blocks that make up your investment. Understanding what they are and how they work together is an essential part of deciding which investments may be right for you. QSuper invests in seven asset classes:

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Cash can include deposits at call, bank bills, term deposits and negotiable certificates of deposit. It is considered the most secure asset class but you need to be aware it has little short-term real growth.

A bond is like a fixed-interest loan to a government or company – the principal sum is paid back when the loan matures along with the interest. Bonds can be actively traded so they have the potential for both positive and negative returns.

Real estate (or property) investments include commercial buildings, industrial properties or residential. Generally, property is designed to be a long-term investment and you could experience negative returns in the short term.

Buying equities means you own part of a company, either in Australia, internationally or a private equity. Shares historically deliver higher returns over the long term and you could experience negative returns in the short term.

Commodities cover resources and raw materials such as natural gas, petroleum, and base and other metals. These can provide protection in periods of high inflation.

Infrastructure is investing in facilities that help a government to run, such as roads, utilities, transport, or public buildings. They aim to achieve both returns through income, and potential capital gain when the assets are sold.

Alternative assets are different to the more traditional assets. The type of alternatives we may invest in include incubator assets (new sources with strong return prospects), and managed funds (through external providers).

Understanding investment risk

All investment comes with some kind of risk. The key is to understand what the different types of risk are, and how they might affect you. Understanding how to manage investment risk can help you build a strategy that suits your lifestyle, both now and in retirement.


Market volatility

A key investment risk is market volatility. This is the risk that the value of your investment could experience both negative and positive returns. Generally, investments with a higher risk have a larger range of returns, while those with lower risk have a smaller range of returns.

Before you choose your investment options, it's important to think about how long you're going to invest for and how you'd react if you were to experience negative returns.

How to read this graph

The graph on the right shows the highest and lowest returns for each of our Diversified and Single Sector options since their first full financial year of returns. For example, while our Australian Shares option has at one point had a minimum return of -19.38%, it has also had a maximum return of 27.34%.

View recent performance

Other types of risk

There are many other types of risk including:

This is the risk that your super will run out. If you are still making contributions, it's important to consider how much super you need in retirement, and the investment options to help you get there. If you are already retired, here are some ways to help make your super last.

This is the risk associated with any single share or security. Specific risk is especially relevant if you choose your own Australian shares investments in Self Invest.

This is the risk that your investment returns do not grow enough above inflation, meaning that your money will effectively be worth less than when you started.

Sequencing risk describes the impact of loss on members at different stages of their retirement. Those in retirement with higher account balances will be more substantially impacted by investment losses than younger members with lower account balances.

This is the risk that an investment manager will not receive their return target.

This risk refers to not being able to sell an asset quickly without losing value. It is something you need to consider if you invest in a term deposit through Self Invest.

This is the risk of selling an investment at the wrong time and losing value. Selling an investment when prices are low might mean that you lose money. Timing risk can also relate to trying to predict future prices in making investment decisions and switching investment options.

Standard Risk Measure (SRM)

The Standard Risk Measure (SRM) is based on industry guidance to allow you to compare investment options that are expected to deliver a similar number of negative annual returns over any 20-year period. The SRM is not a complete assessment of all forms of investment risk. For more information, see the Investment Choice Guide (pdf).

How SRM is calculated

For each of our investment options, we calculate our SRMs based on the following:

  • Capital market assumptions, established for factors such as the return and volatility of each asset class within our investment options
  • Projections, used to forecast likely future returns. We specifically determine the likelihood of a negative return over one year, then multiply this result by 20 to calculate the likely number of negative returns over 20 years
  • SRMs are determined after investment management fees are deducted, and before administration fees are applied (keep in mind that higher fees will increase the likelihood of a negative return)
  • SRMs are calculated before tax and without franking credits
  • The asset allocation used for each of the Diversified options assumes a constant set of underlying economic conditions (such as Gross Domestic Product, inflation, and interest rates), often described as the 'equilibrium position'.

Learn more

QSuper provides a range of investment options that are tailored to your needs.

Investment options

1. For Accumulation accounts only.
2. For Income and Accumulation account members who receive personal financial advice from QInvest (ABN 35 063 511 580, AFSL 238274), the QSuper Board may pay for some or all the advice fee for advice related to your QSuper benefit. Eligibility conditions apply. Refer to the Financial Services Guide for more information.