Superfund members around the country last year made some of the most winning investments, with Superfund’s on average demonstrating an overall growth of 7%, and the top two growth super funds and taking out poll position yet again with a whopping 9.9% growth each.
A growth Superfund is one that allocates between 61% to 80% to growth assets, and are the most popular option for investment for Australians. The top scoring funds may have used two completely different investment strategies to achieve the same amount of growth last year, which speaks to the fact that there is not one single ‘right’ way to invest, but investing can be fruitful.
So what do you need to look at when choosing to invest in a Superfund?
Unlisited Vs Listed Assets
A Superfund may adopt the approach of investing in unlisted assets; maintain a significant interest in long duration bonds – with less risk than a share market. Most of their investments are made in property, infrastructure and private equity. Alternatively, to take the opposite approach means choosing to invest in listed assets, which they believe makes them more opportunistic to developing a portfolio, which has higher quality investment in property and infrastructure. They mostly invest theirs funds in listed companies.
When deciding on a Superfund that will yield the greatest returns for you, it is important to consider the bigger picture and the returns that you want to achieve, over the period of time that you wish to achieve them, and where in the life-cycle you currently are. Those who are older and been invested in the fund for longer generally have greater returns.
You need to consider risk factors associated with the Superfund that you are considering for investment. Superfund’s typically see risk as a negative return, and set objectives of no more than one negative return in 5 years. The delivery on these promises have often been met by Australia’s largest Superfund’s, however there are many more options on the market now – and your willingness to accept more risk may in some cases produce greater results.
While the investment strategies differ from fund to fund, they are all driven by the performance of the investment market. You need to consider what the performance has been like over the years, and where your chosen fund’s returns sit based on this and the strategy they have chosen versus the fees that you are charged.
CAAA Commercial Concierge can assist you with choosing the right Superfund by bench-marking its performance against others in the market and assisting you to identify the risk factors. A dedicated Wealth management specialist will be able to provide you with further advice on which fund is right for you.