How to choose an investment option that’s right for you

29 September 2021

The choices you make for your superannuation investments today can make a difference to your future lifestyle in retirement. When choosing an investment option, three of the most important factors to consider are:

• Your age now, and when you plan to retire – this is your investment timeframe.
• Your financial goals – the returns needed to achieve a comfortable retirement.
• Your tolerance for risk – the level of investment risk that you are comfortable with at this stage in your life.

If your timeframe to retirement is long, generally you can afford to take more risk and potentially benefit from higher investment returns. If your timeframe is shorter, you may need to reduce your risk and potentially receive lower returns.

Understanding your risk profile

Knowing the level of risk that you’re prepared to accept will help you decide which investment option is best for you.

Your tolerance for risk is also known as your risk profile, and it is different for everyone.

To learn more about yours, try our Investment risk profiler.

Investment options and their risks

Our investment options are described in the Investment Choice Guide (available for different accounts at PDS and Guides). The guide includes details about each option’s investment aims, types of assets that are being invested in, and the risk levels.

Investment options consist of one or more types of assets such as shares, bonds, property and infrastructure, which are known as asset classes. Each option has a different level of risk, dependent on the assets that are being investing in.

Investment options are classified as conservative, growth or balanced.

• Conservative options have a lower level of risk, generally delivering lower returns over the long term.
• Growth options have a higher level or risk, aiming for higher average returns in the long term.
• Balanced options aim for reasonable returns in the long term, with risk levels in between conservative and growth options.

Our range of options

LGIAsuper offers you a choice of how you want your savings invested. We have a wide range of investment options to cater for different financial situations and goals.

You can build your own investment strategy or choose from one of our ready-made options.

Investment options can be changed at any time. This is known as investment switching. We urge members to seek financial advice before making decisions about investment options

a. Ready-made options

Our Ready-made investment options are a combination of asset classes – we sometimes refer to these as diversified options.

• MySuper – this is our default option. It is a simple, cost-effective and diversified investment option, which is used by most of our members. Super funds must be authorised to provide a MySuper option, which enables members to compare products across the superannuation industry.
• Aggressive – for members seeking potentially high returns and prepared to accept potentially significant fluctuations in returns over shorter time periods.
• Diversified Growth – for members seeking moderate to high returns and prepared to accept potentially modest to significant fluctuations in returns over shorter periods.
• Balanced – for members seeking moderate returns and prepared to accept potentially modest fluctuations in returns over shorter time periods.
• Stable – for members seeking modest returns and who are averse to fluctuations over the short term.
• Defensive – for members wanting to stay ahead of inflation and generally averse to fluctuations in returns over shorter periods.

b. Single Asset Class options

We have investment options consisting of one type of asset class. These options can be mixed and matched to build your own investment strategy.

• International Shares – for members seeking potentially high returns and prepared to accept potentially significant fluctuations in returns over shorter time periods.
• Australian Shares – for members seeking potentially high returns and prepared to accept potentially significant fluctuations in returns over shorter time periods.
• Property – for members seeking potentially moderate to high returns and prepared to accept potentially significant fluctuations in returns over shorter time periods.
• Diversified Fixed Interest – for members seeking modest returns and who are averse to fluctuations over the short term.
• Cash – for members who are concerned about protecting their capital and accept a low rate of return on their capital.

c. Socially Responsible options

We offer two Socially Responsible (SR) investment options for members seeking investments made with environmental, social and governance factors considered when investing:

• SR Balanced – for members seeking a socially responsible investment with potentially reasonably high returns, prepared to accept potentially modest to significant fluctuations in returns over shorter periods.
• SR Australian Shares – for members seeking a socially responsible investment with potentially high returns (from Australian shares only) and prepared to accept potentially significant fluctuations in returns over shorter time periods.

Financial advice

Deciding on the best investment approach can be difficult. Our financial advice service* can help you plan for a better financial future.

LGIAsuper members can receive limited advice on a single topic related to superannuation, at no additional cost. More comprehensive financial advice is also available, for which fees will vary.

Call us on 1800 444 396 to discuss a financial advice option that suits you best.

Further information

Further information about our investments options is available at:

• Investment Choice Guide – available for different accounts at PDS and Guides
• Investments information on our website
• Investment risk profiler