Key takeaways

  • Understanding the different types of investments in super and how they work, can help you decide if your current investment approach is right for you

  • A growth investment approach has the potential to provide you with higher returns, over the long term

  • A defensive investment approach aims to provide investors with regular income. This helps to keep their values stable which means they have relatively low volatility or risk.

If you’re not satisfied with your super returns, beyond seeking advice from your super fund or a financial adviser, it’s important to review your investment approach.

Generally, when you’re young your investment approach can be more aggressive as you have time on your side to ride out losses. As you get older and are closer to retiring, your strategy can become more conservative.

Understanding the different types of investments in super and how they work, may help you decide if your current investment approach is right for you.

Three super options

Generally super funds allow their members to choose where they want to sit on the risk return spectrum. They usually do this by offering a choice between the following investment approaches.


About a third of your super is invested in shares and property and the rest in fixed-interest investments.


About 70 per cent of your super is invested in shares or property and the rest in fixed-interest investments. Over the longer term, you should enjoy better return than the conservative approach, but market downturns could result in big losses. 


About 85 per cent of your money is invested in shares and property, with only a small fraction tucked away in fixed interest investments. More impressive returns are likely over long timeframes but a big sharemarket crash could see a large chunk of your retirement funds evaporate overnight.

Growth asset classes explained

Growth asset classes have the potential higher returns, over the long term, by increasing the value of an original investment.

Investment returns are more likely to fluctuate over a short period however, due to changes in the market and other economic factors. Common examples of growth assets are shares and property.


Shares are considered as a growth asset and aim to provide greater returns over a longer timeframe.
When invested in shares, an investor becomes a co-owner of the business – these could be household names like BHP, Telstra, and Amazon.

Returns from shares can be received in two ways:

  • an increase in the company’s share price which makes an original investment more valuable, and

  • dividends which are an investor’s share of the profits that the business makes.

On the flip side, share prices change daily so they present greater volatility and are considered higher risk.


Property is also considered a growth asset as its value has the potential to grow over time and is one of few investment types that’s tangible — something you can see, feel and touch.

Broadly, there are three main ways someone can invest in property.

  • Residential property: can be as an owner-occupier or investor. Values can change depending on demand in the market and supply of propertiescan be as an owner-occupier or investor. Values can change depending on demand in the market and supply of properties.

  • Real Estate Investment Trusts: trade on sharemarkets, in the same way as shares do, and give investors access to commercial property.

  • Unlisted Property Trusts: can also give access to properties through a trust, similarly to REITs. However, they are not traded on stock exchanges. When buying into an Unlisted Property Trust, an investor essentially buys a ‘unit’ in a Trust that holds the properties and the Trust is managed by an investment manager.

Defensive asset classes explained

Defensive asset classes aim to provide regular income. This helps to keep their values stable which means they have relatively low volatility or risk.

The downside to this safety is that over the long term, defensive asset classes usually deliver lower returns than growth asset classes. In addition, those returns may not be enough to protect you from the rising cost of living.


Cash is regarded as a defensive asset class given it generally doesn’t rise in value by much. It’s also considered to be one of the safest asset classes as it’s unlikely that an investor will lose money.
An investment in cash can be via a bank savings account or a short maturity term deposit, for example. 


The best-known type of fixed income investments are bonds. They are considered part of the defensive asset cluster as they usually have lower risk than shares or property.

When investing in bonds you’re essentially lending money to a government agency, if it’s a government bond, or to a business in the case of corporate bonds.

With a bond, returns come in the form of the interest received from the loan. When there are changes in interest rates, the value of the bond changes too. For example, when interest rates rise, bonds with lower interest rates are less appealing to investors so their value tends to fall. On the flip side, when interest rates fall, their values tend to rise.

Seek help from a professional

If you value the experience of experts in other aspects of your life, don’t discount it when it comes to managing your life savings.

A conversation with us on 1300 765 811 could help you determine if your super’s investment approach is right for your needs.

They can also help with other aspects of your financial life—savings, insurance, tax, debt—while keeping you on track to achieve your goals.

More importantly, they can answer questions like:

  • What age can I stop working and retire?

  • What strategies can I use to build my wealth?

  • How can I ensure my wealth is transferred to my children?

If your to-do list is endless and you never quite have time to tackle your personal finances, a financial adviser may help to set you on the right track. Speak to us on 1300 765 811.

Important information and disclaimer

This article has been prepared by NULIS Nominees (Australia) Limited ABN 80 008 515 633 AFSL 236465 (NULIS) as trustee of the MLC Super Fund ABN 70 732 426 024. NULIS is part of the group of companies comprising Insignia Financial Ltd ABN 49 100 103 722 and its related bodies corporate (‘Insignia Financial Group’). The information in this article is current as at May 2022 and may be subject to change. This information may constitute general advice. The information in this article is general in nature and does not take into account your personal objectives, financial situation or needs. You should consider obtaining independent advice before making any financial decisions based on this information. You should not rely on this article to determine your personal tax obligations. Please consult a registered tax agent for this purpose. Opinions constitute our judgement at the time of issue. The case study examples (if any) provided in this article have been included for illustrative purposes only and should not be relied upon for decision making. Subject to terms implied by law and which cannot be excluded, neither NULIS nor any member of the Insignia Financial Group accept responsibility for any loss or liability incurred by you in respect of any error, omission or misrepresentation in the information in this communication.