Your superannuation is an investment, which involves both risk and return.

It's invested in various asset classes, which is determined by the chosen or default investment option applicable to you. The mix of asset classes you will be exposed to depends on your investment options and the level of risk you’re willing to take.

What is investment risk?

Investment risk refers to the level of volatility or fluctuation in investment returns you’re prepared to accept, including the potential loss of some of your capital (initial investment amount). For example, risk can mean that:

1. your investments might decrease in value due to a drop in market value
2. your capital doesn’t grow enough to keep pace with Consumer Price Index (CPI)
3. you won’t have enough money to draw a reasonable income when you retire or during retirement.

Generally, the higher your expected level of return, the greater the level of risk you will have to accept, particularly over the shorter term.  Your age, current financial situation and length of time to (or in) retirement could all be factors which influence your risk profile. 

What is diversification?

Simply put, diversification refers to spreading your eggs (money) into many different baskets (e.g. asset classes). It enables you to balance risk and return, so you have a better chance of protecting your money from a fall in value and reducing the risk of low or negative returns. Most of our investment options are spread over a range of asset classes and industry sectors. This is called diversification.

What is an investment time frame?

Usually, your age and proximity to retirement will determine whether you’re investing for the:

• short-term (1 to 3 years)
• medium-term (3 to 7 years)
• long-term (more than 10 years).

Investment markets move up and down over time as will the value of your investment. If you have many years to invest, you may be prepared to take on more risk in your investment portfolio. In this situation, you’ll have time to ride out any short-term fluctuations in investment returns and benefit from the higher potential returns offered by growth investments such as equities (shares).

Why is making an investment choice important?

After you become a member you can make a decision as to how you would like to invest your super, or a default investment option will apply. Choosing where to invest your money doesn’t have to be a difficult decision if you’re aware of your overall investment objectives, risk profile and the amount of time you have to invest. Your consideration of these factors and your level of comfort with risk will determine the investment option best suited to your needs. We offer our members six investment options to choose from, because we understand that one investment option doesn’t fit all members.

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

If you don’t make an investment choice, that’s OK. We’ll still look after you by investing your super in our Lifecycle strategy. We know everyone has different investment needs, so we’ve created a range of default options based on your age. Since you're aged under 50, if you don't make an investment choice, you'll be automatically invested in our Long-Term Growth investment strategy.

Once you turn 50, your super will be invested in the Medium-Term Growth option unless you choose another option. You will receive a letter before your 50th birthday notifying you of this and giving you the opportunity to choose your investment option.

How do you make an investment choice?

It’s easy. If you’re an existing member and you would like to change your investment option, all you need to do is download the Change my investment option form. You can switch between investment options up to 12 times a year for free.

Need more information?

You can refer to the Investment Guide for more detailed information.

If you need help identifying an investment strategy that best suits your situation and life goals, you should seek the advice of a qualified financial planner like Health Super Financial Planning.

Health Super Financial Services Pty Ltd ABN 37 096 452 318, AFSL 240019 trading as Health Super Financial Planning (HSFP) is wholly owned by the FSS Trustee Corporation ABN 11 118 202 672 AFSL 293340 Trustee of the First State Superannuation Scheme ABN 53 226 460 365.
The Trustee pays HSFP half of the annual 1% account-keeping fee collected on all Health Super Account Based Pensions. The Trustee also pays a variable monthly amount (calculated on a cost recovery basis) to HSFP to conduct member seminar programs. The Trustee is not a representative of HSFP and receives no commissions when making referrals to this service. To obtain further information about the services provided by HSFP, contact HSFP direct by telephoning 1300 780 223. Alternatively, visit  HSFP’s website at hsfp.com.au