Super asset allocation: What it is it?

Deputy Editor · 28 September 2021
Canstar rounds up some of the common investment options you may encounter if you’re deciding how to allocate your superannuation savings. We also asked a financial advisor to explain why it’s important to consider being proactive in picking your own investment option.

What are the main super asset allocation options?

Super funds typically offer a range of standard investment options to their members, sometimes referred to as ‘pre-mixed’ options. Some of the more common options you may encounter include cash, conservative, balanced, growth and ethical allocations.

How allocation options are labelled and marketed to potential members can vary from fund to fund. Here’s an overview of some of the more common options, according to the federal government’s Moneysmart website:


This asset type invests 100% of your money in deposits (such as term deposits) with Australian deposit-taking institutions or in a ‘capital guaranteed’ life insurance policy. It aims to avoid investment losses.


This allocation generally invests around 30% in shares and property, and 70% in fixed interest (such as government bonds) and cash. The aim is to mitigate risk, often with a lower investment return than other options as a result.


This typically invests around 50-70% in shares or property, and the remainder is in fixed interest and cash. The aim is generally decent returns while managing risk.

Growth/high growth/aggressive

The aim here is generally higher than average growth over the long term, with 85-100% invested in shares or property, and up to 15% in fixed interest or cash.


This type of allocation generally aims to only invest in companies that meet certain environmental or social criteria, but the exact makeup of the investment will depend on the fund. There can be ‘ethical’ allocation options with varying levels of risk.


In addition to the pre-mixed options, some funds enable members to select their own investments, to varying degrees. For example, some funds may allow you to dial up or down the percentage of your money that’s invested in a particular asset class, while others may allow you to go a step further by choosing which companies’ shares to invest in. You may even have the option of investing in international shares instead of domestic ones.

How to pick an investment option in your super fund, according to an expert

Financial adviser Ben Brett of Bounce Financial explained to Canstar some of the main considerations for choosing an investment option in your super.

Take it away, Ben.

Ben Brett
Ben Brett of Bounce Financial.

It can be tempting to assume that you don’t need to make decisions about your investments in your superannuation fund and that the fund and the government will make sure you have the best option. While they do their best, they really can’t be expected to understand your particular situation.

So be sure when reviewing your superannuation to not only review the fund, but the underlying investment option. When you retire, you’ll be glad you did.

What is the ideal asset allocation?

To understand which investment option may suit you, there are usually two things I like to consider:

  •         How comfortable you would be if your superannuation reduced in value (your risk-profile); and
  •         How long before you need to access your superannuation.

Your risk profile

It’s important when considering this to understand what is meant by the word ‘risk’. To the average person, they associate the word risk with the risk of ‘losing it all’. Whilst this is a risk, most of the major super funds with simple investment options are pretty good at managing the risk of ‘losing it all’. They do this by diversifying your investments.

The more common risk is that your superannuation balance may go down in value, at least in the short term.

In order to select an appropriate investment option, you need to understand the risks so that you can decide if you are comfortable with them.

In most major super funds with simple options, you will be given the opportunity to select an investment option that ranges from ‘aggressive’ to ‘conservative’.

Aggressive options tend to be the investment options which have traditionally performed the best but have the most amount of risk (they can go down in value quite a lot).

Conservative options tend to be the opposite, in that they have those investments which have traditionally had lower returns but have less risk (they tend not to go down as much as the more aggressive option).

Just to make things confusing, there are also a whole bunch of options in between.

Investing in an ‘aggressive’ investment can be a wild ride. For example, in February to March 2020 when the coronavirus pandemic first became apparent, the S&P/ASX 200 (the index that tracks the 200 largest Australian listed companies) dropped over 30%.

For a lot of people with aggressive investment options, they saw similar drops during this period which caused a lot of worry.

If you’re the kind of person who checks your superannuation daily and knows you couldn’t tolerate this, then maybe avoiding an aggressive option might be appropriate. The worst thing you can do at this time is panic and move your superannuation into cash, so knowing upfront how you are going to feel can help you make informed decisions when things like this happen.

That being said, please don’t take this decision lightly. A few extra percent return each year could add up to hundreds of thousands of dollars in retirement, so be aware that peace of mind can come at a cost.

How long until you need to access your superannuation

As noted above, investing in aggressive investments can be a wild ride. During your working years, if your investment drops substantially, you have the time to wait until it rises again in value. This can take many years.

If you’re looking to access your superannuation in the next couple of years, however, these drops could be disastrous.

As you approach retirement, you should consider reviewing your investment strategy. For money that you intend to access shortly, you may be willing to give up potential returns for less risk.

It’s important though to not treat your entire superannuation benefit as one investment. While you may need money in the short term, your super may be invested for the next 30 years, meaning some of it could benefit from a more aggressive option. This is where speaking to a financial adviser can help you plan for your retirement.

About Ben Brett

Brisbane financial planner, Ben Brett of Bounce Financial, specialises in providing financial advice to young professionals who have bought their first home and are wondering what comes next. In 2020, he was nominated in the Newcomer Of The Year category at the Independent Financial Advisor Awards. Connect with him on LinkedIn.

Cover image source: By Anna_Pustynnikova/

Sub edited by Milan Cuk.

Thanks for visiting Canstar, Australia’s biggest financial comparison site*

Sean has more than a decade of experience in journalism and communications roles in Australia, the UK and Ireland. His work covers a range of topics including finance, banking, property, investing, consumer and legal affairs, and more.

Share this article