Superannuation investment options

How is superannuation invested?

Your superannuation is invested in a range of growth assets and defensive assets. Growth assets are considered to be higher risk, but also potentially higher return. Defensive assets on the other hand carry much less risk, but also don't offer very high returns.

Growth assets include

• Infrastructure
• Australian shares (including via ETFs)
• International shares
• Private capital including investments in private companies that aren't publicly listed
• Property including commercial, industrial or real estate trusts

Defensive assets include

• Cash products like savings accounts and term deposits
• Fixed interest including corporate and government bonds

Expert insight

"Your super's investment return is about 90% down to asset allocation and the option you select. Choosing the right mix now can make all the difference to your long super results"

Karen Eley

Editorial Review Board

Types of superannuation investment options

Most super funds will offer a choice between a number of pre-mixed, diversified investment portfolios or a build-your-own option for those who want to be more hands-on with their super. The pre-mixed investment portfolios will invest in a range of growth and defensive assets, while the single asset options invest in just the one asset class. Let's take a look at these options in a bit more detail.

Lifecycle

With this option your super is invested in line with your age. As you get older the assets your super is invested in begin to change, as does the level of risk you're taking on. It's typically understood that when you're young a lot more of your super balance can be invested in riskier, high-growth asset classes like international shares.

If you're in your 20s or 30s you have a lot more time to ride the ups and downs of the stock market compared to someone in their 50s. As you get closer to retirement, a larger percentage of your super will be invested in safer assets like cash and fixed interest.

Balanced

This pre-mixed investment option is a balance between growth and defensive assets, usually classed as medium to high risk. The balanced investment options will vary between different super funds, but they generally allocate around 65–70% of your super balance to growth assets and 30–35% to defensive assets. The balanced option is often the default option offered by super funds (often called MySuper).

Growth or high growth

The growth and high-growth investment options are high risk or very high risk, for potentially high returns. The growth investment option will allocate about 80–90% of your super balance to growth assets like shares and property. If your fund offers a high-growth investment option, this will likely allocate 100% (or close to it) of your balance to high-risk assets. These investment options are recommended for longer time periods of at least 7 to 10 years, or more.

Conservative

The conservative investment option is low to medium risk and suited for people closer to retirement who want to protect their retirement savings. The conservative investment option will allocate around 20% to 30% of your super balance to growth assets like shares and property, while the remainder will be in lower-risk options like savings accounts and bonds.

Socially responsible

Some super funds offer a socially responsible or ethical investment option, which aims to invest in socially responsible assets. For example, it might not invest in companies associated with tobacco production, gambling or ammunition manufacturing. The risk level and asset allocation will vary between different super funds, though this option is usually a similar level of risk as the balanced investment option (medium to high risk).

It's a common misconception that ethical investments don't perform as well as other investments, but this is not the case. In fact, returns from socially responsible investment portfolios vary by fund and time period — compare the specific option's long-term return against your fund's default before assuming either is better.

Single asset classes

This option is for those who want a bit more say over how their super is invested. Rather than a pre-mixed investment option based on risk level like those listed above, some super funds offer this build-your-own option allowing you to select from a range of individual asset classes to design your own portfolio.

For example, you might decide to allocate 70% of your balance to international shares, 20% to Australian shares and the remaining 10% to property, creating your own high-risk investment option. Note that you can select the asset classes, eg, shares and property, but not the individual investments. That is, you can't select which shares or which property.

Expert insight

"The thinking that you had to be 'young' to invest in high-growth funds has now iterated - particularly as the retirement age keeps increasing! However, whatever your age, make sure you understand how your high-growth fund is invested; if it's almost entirely invested in growth assets, you'll have a different outcome compared to a fund whose portfolio is 70% in growth assets. Make sure you're looking under the hood to understand how the performance engine works."

Pascale Helyar

Superannuation and wealth expert

Editor's note: Preservation age has been 60 for everyone since 1 July 2024 and Age Pension age has been 67 since 1 July 2023.

How to choose a super investment option

Here are the key things to consider when choosing your super investment option.

• Your age. If you're young it's a good idea to invest in growth or high-growth options, which you can switch back into balanced and then conservative as you get closer to retirement.
• Your risk tolerance. Regardless of your age, if the thought of your super being invested in high-risk assets will keep you awake at night, you might want to stick to a balanced option instead.
• Your personal values. If you're passionate about particular industries and want to avoid others, take a look at where exactly your super will be invested with each available option. This detail should be available on the super fund's website.
• The fees. Different investment options will charge different fees, so make sure to check how much you'll be paying for each investment option when making your decision.

Ready to choose a super investment option? Compare super funds now.

Frequently Asked Questions

• How does superannuation investment work?

  Superannuation investments work by pooling contributions from employees and employers into a fund, which is then invested in a diversified portfolio of assets like shares, property and bonds. The returns generated from these investments help grow your retirement savings.

• What is the best way to invest in super?

  The best way to invest in super depends on your risk tolerance and financial goals. You can choose a super fund that aligns with your investment strategy, such as a high-growth option for aggressive investors or a balanced fund for more moderate risk. Regular contributions and reviewing your investment strategy can enhance returns.

• Can I use my superannuation for investment?

  While you cannot directly access superannuation funds for personal investments before retirement, your super is automatically invested by your super fund in a range of assets like stocks, property and bonds, depending on your chosen investment option.

• Is it better to have savings or superannuation?

  Superannuation is better for long-term retirement savings due to its tax advantages and employer contributions, while savings accounts are more suitable for short-term goals and emergencies because of their accessibility and liquidity.

• What are the disadvantages of superannuation?

  Disadvantages of superannuation include restricted access to funds until retirement, potential changes in government policy, and the impact of fees on your overall balance. Additionally, investment returns can fluctuate based on market conditions.

• What is a good rate of return on superannuation?

  A good rate of return on superannuation is typically around 7-8% per annum over the long term, but this can vary depending on your chosen investment strategy and market performance. Chant West data to June 2026 shows the median Growth option (61–80% growth assets) returned 7.9% per year over the past 15 years — note Chant West's Growth band differs from the 80–90% growth allocation this page defines as Growth, so compare like for like. Balanced funds often target returns in this range, balancing risk and growth potential.

• What is the safest investment option?

  Defensive assets like cash are the safest in terms of avoiding investment losses. However, cash as an asset class offers very little return on your money - so while you won't be losing money, you won't gain much either.

Written by

Alison Banney

Editorial Manager, Money

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Alison is an editor at Finder and a personal finance journalist with over 10 years of experience, having contributed to major financial institutions and publications such as Westpac, Money Magazine, and Yahoo Finance. She is frequently quoted in media outlets like SmartCompany and SBS, offering expert insights on superannuation and money management. Alison holds a Bachelor of Communications in Public Relations and Journalism from the University of Newcastle, and has earned three ASIC RG146 certifications in superannuation, securities and managed investments and general financial advice, ensuring her expertise is fully aligned with ASIC standards. See full bio

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Alison has written 592 Finder guides across topics including:

• Superannuation
• Savings accounts, bank accounts and term deposits
• Budgeting and money-saving hacks
• Managing the cost of living