Investing your super
Wondering how investing and superannuation work together? Our team explains.
An asset class is a type of investment. The main asset classes that people refer to are shares, property, infrastructure, fixed interest and cash.
The reason why it's so important to understand asset classes is because they each have different levels of risk and return – the main criteria by which investors generally choose what they invest in.
Understanding what to expect from the different asset classes will help you decide which types of investments best suit your needs and investment timeframe.
Most members have a mix of assets in their super. This is important because each type of asset responds differently to market fluctuations – for example when share market are down, fixed interest investments may be up. Diversifying how your money is invested is an important strategy for managing volatility in your portfolio. It will help soften the impact of falls in individual markets and make your super less reliant on the performance of one particular asset class.
You can check how your super is invested by logging on to FirstNet or the Colonial First State app, or by checking your statement. If you want to change the amount of diversification in your super portfolio, we recommend speaking to your financial adviser first.
To help your super grow, your super fund invests your money into a portfolio of assets – such as growth assets like shares and property, or more defensive assets like cash and fixed interest.
Depending on conditions in financial markets, all investments will perform differently. But by diversifying your super fund investments, you can avoid putting all your eggs in one basket – meaning, you can generate investment returns from different assets and help protect your super balance when financial markets fluctuate over time.
Wherever you stand on investments and super, we’re here to help you get to where you need to be. Click through for a more detailed explanation of diversification and why it can be important in an investment portfolio.