The Super Fund Co. Blog

Like most superannuation companies, The Super Fund Co. has a range of model investment portfolios available for our clients, depending upon their personal situation and their risk appetite. But what does all this mean? 

Well, we have a range of 5 portfolios that we place clients in – with some individual tweaking – after we have assessed their needs and decided which portfolio is the best match. Each portfolio has a mix of what we call growth investments (or assets) and defensive investments.

Growth assets are expected to give a higher return, however are more risky. An example of a growth asset is shares or property – their price or value may rise, but it can also fall depending upon market factors. Growth assets are therefore more suited to longer-term investors who can ride out the ‘peaks and troughs’ of the investment.

Defensive assets typically deliver a lower return, but are more consistent and predictable - for example, a bank term deposit or fixed interest account. The return is relatively stable and known – for example, you know the bank is going to give you 2.25% on your deposit every month - however the return is relatively low compared to growth assets.

The key is choosing an investment portfolio that has the appropriate mix of growth and defensive investment for you. This is called asset allocation.

The picture above illustrates the average mix between growth and defensive assets in our 5 model portfolios. Investors who are recommended the Growth portfolio are heavily weighted to growth investments (85%), and typically hold only 15% defensive assets. This portfolio suits investors that have at least a 9 year investment timeframe (ie. those in their 30’s and 40’s), or those who are willing to accept higher levels of investment volatility in return for potentially higher returns.

At the other end of the spectrum, our Conservative portfolio is 80% defensive assets (mostly cash and fixed interest), and 20% growth investments. This suits investors who are primarily looking for income and capital stability, and who have little concern for the potential of capital growth.

Each of our 5 model portfolios is reviewed regularly, and at least four times a year we update the individual investments to make sure they are still meeting the investment objective and returning the maximum benefit for our clients. The end goal is always to maximise returns, in line with our clients’ risk appetites, to help them reach their retirement goals sooner.

In next week’s blog, we’ll delve down a little deeper into the asset allocation of our portfolios, and explain in plain English what each of the investment classes are.

In the meantime, if you have any questions about your investment portfolio or would like to talk to one of The Super Fund Co. advisers, just drop us an email or give us a call – we’re always ready to talk super!