Making an investment choice for your super

Step 4 – Understand your options

There are a number of ways you can approach your super’s investments. Here are some key approaches to consider:

• Index investing also known as passive investing. This approach aims to match the median results of the market. It’s seen as a low-cost way to generate returns over the long-term.
• Active investing means active decisions are made about how your super is invested, with the goal of outperforming the market.
• ESG investing (or ethical, social and governance investing). For good reason, many people want to make sure their super is being invested responsibly.
• Growth assets eg shares and property. These usually have a higher level of volatility than defensive assets and their asset values can change day-to-day (sometimes by a lot). However, they have the potential for higher returns than defensive assets over the longer-term.
• Defensive assets eg cash and fixed interest. These are less volatile than growth assets, however their overall return potential is also lower.
  
  

Remember: You don’t have to choose one option. You can mix it up depending on your risk profile and goals.

Step 5 – Getting into the details

Once you’re clear about the style of investor you are, and general the approach you’d like your investments to take, there’s another layer or choice you can think about or discuss with your adviser.

Step 6 – Make your investment choice

Once you’re clear about your goals, risk profile and options, you can start thinking about which investment choices you’re ready to make. A financial adviser can help you choose the options that suit you.

You can also make an investment choice and review your investments in My AMP.

Step 7 - Reviewing your choices

An annual review of your investment choices is usually worthwhile. This is because personal preferences, financial situations and long-term goals tend to change over time, meaning your investment strategy should be reviewed and adjusted to meet your new needs.