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How to choose your superannuation investment options

8 May 2023

Your superannuation investment strategy can significantly impact your retirement outcomes. But with so many options available, how do you choose the right one? Join Australian Retirement Trust’s Head of Private Corporate Assets, Elizabeth Kumaru, and Head of Advice and Guidance, Anne Fuchs, as they discuss how super is invested and what you need to consider when choosing an investment approach that suits your needs and retirement goals. Tune in to this must-listen episode to gain valuable insight and take control of your super.

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Hello and welcome to Super Insider,

Australian Retirement Trust's podcast and web series

that is all about investments, the economy

and strategies to make sure you maximise

your retirement savings.

My name is Anne Fuchs.

I'm head of Advice and Guidance

at Australian Retirement Trust.

The team and I love helping our 2.2 million members

make the best possible decisions

about their retirement savings.

We're sitting here today on Turrbal and Yuggera country,

and I'd like to pay my respects

to Elders past, present and emerging.

Now, Super Insider is about bringing

all of the inside knowledge to you, our members,

so that you feel really confident and empowered

about your retirement savings.

And I have to say, we've got another sensational guest

on Super Insider, Liz Kumaru.

Liz is our Head of Private Corporate Assets

here at Australian Retirement Trust.

She has 25 years of experience,

and has so much investment knowledge

and expertise in her head.

So, today, it's my job to try and extract

some of that knowledge to help you understand

and think about what is the right investment choice for you.

You would have maybe heard Brian Parker and I

talk a lot about the economy and investments,

and today it's just going,

I guess, that step further in terms of really understanding

how to approach investing for you

so you do get the most out of your super.

Now, Liz, welcome.

Thank you. It's great to be here.

Yes, and you get the joy

of our general advice warning before we begin.

So, over to you.

So, we get the big tick with Compliance.

Of course, yes.

Before we begin, I need to let everyone know

that what we're going to talk about today

is general information only.

Any advice doesn't take into account

your personal situation.

So, you should consider your circumstances

and think about getting personal advice

before acting on anything we discuss.

You can also get a copy of our Product Disclosure Statement

from our website or by calling us on 13 11 84

if you have a Super Savings account,

or 1 300 360 750 if you have a QSuper account.

Hip, hip, hooray!

That's done.

Okay, gold star for us.

Now, where do we begin?

I know I talk about my kids,

have just started working and have got

their first Australian Retirement Trust account,

and are interested investors.

And then equally I know quite a few old people,

in their 70s or older people, older Australians,

who are in their 70s

and as just as interested as the young people.

So I guess where do we start

in terms of investment strategies,

and how do you as an investment team

approach this huge lifespan of people

that we have to grow and invest money for?

It might be worth while just starting with saying,

what is an investment strategy?

Oh, good idea.

Let's start with that.

So, an investment strategy is the plan

or the different mix of assets

that are most likely to achieve the objective

that you're trying to achieve.

And it's not that different -

if you can use buying a car as an analogy.

You go buy a car, that car will get you from A to B,

but you'll have certain preferences,

requirements and objectives from that car.

You might prefer a red car.

I prefer a German car.

Or you'd prefer a German car.

I'm married to a German.

Yes, you might have a big family

and so you need a car with lots of seats.

You might think about taking it off road,

so you might need a four-wheel-drive.

That is the personal circumstances and preferences

that will determine the type of car you buy.

An investment strategy is not that different.

You need to think about and understand

your personal circumstances, preferences and objectives

of what you want to achieve in retirement,

and that will help you understand what type of assets

and investment strategy suits you

to meet your objectives.

So do you think - to that, you know, starting out

where I mentioned, teenagers versus people

in their 70s or 80s.

Is it possible, with that explanation,

that at either sort of end of the bookend of life

stages around investing, you could have a similar mindset

to investing, couldn't you?

You could have similar needs

around your appetite to risk, for example?

It is possible.

So, age is definitely one determinant

that you should consider when thinking about

investment strategy that you should use.

So, in your early years,

there is a long time before you retire,

and you are still working

and you can still deliver an income.

So, you may actually be capable

of tolerating some higher risk investments

because those higher risk investments,

growth investments, like shares, for example,

can have a higher expected return over time,

but they can have volatility.

I know, Liz too - sorry to interrupt you,

but some of the portfolio that you've got, private debt

and private capital, and some of those,

are they growth assets, too?

Yes, so very happy -

maybe I should walk through the different types

of investments that you can find

in different investment options.

So, the very one that we've already spoken about is shares,

and that is owning a piece of the company.

It's also sometimes referred to as equity,

and that means that, if the company does well

and earnings grow, you will be a beneficiary in that

because you own a piece of that company

so you will do well as well.

But equally, if that company has challenging times,

that will impact the value of your investment.

So, it has the possibility

of delivering strong returns over time,

but it can have some bumps along the road,

and there is a higher risk of more volatility.

An example of that is buying shares in Woolworths or Coles,

if you shop in those supermarkets.

So, if you buy shares in Woolies and Coles,

to the extent that they deliver a good profit,

you will benefit from that as well as a shareholder.

Cash is another option, and that is literally

putting money in a bank and generating

a yield on that money. And I think we all know

that the cash rate you're getting today

is better than it was only a little while ago.

And then you've got fixed interest,

which are also known as bonds.

And fixed interest is where I will lend you money,

and in order for me to give you money,

you need to pay me a dividend yield.

And there's a really diverse range

of fixed interest or bond investments.

You can have low risk if you lend money to a government.

That's pretty comfortable

that you're going to get that yield and that money back.

So, the yield that you get from that is relatively lower.

However, if you give it to a company

that might be a little bit stressed,

in order to incentivise you to lend that money to them,

you're going to want a big return.

And so there is a big range of different types

of fixed interest instruments that you can invest in.

And then you can go to what we refer to

as our alternative asset classes,

which you talked about before.

And broadly speaking, they're unlisted.

So, you can't buy them on a standard stock exchange.

They're much more difficult to access,

but there is a huge opportunity set out there.

And so you were talking about private equity.

Just like there are companies

that are listed on stock exchanges,

there are hundreds of thousands of companies

that are operating profitable businesses

that aren't listed on stock exchanges.

It would be impossible for

people, just as an individual, to go and invest in these.

So this is why super is so exciting and cool.

Who would've thought? Because you can invest

in these amazing companies

that you wouldn't be able to otherwise.


One of the most amazing things of my role

is that I get to see some very unique

and very different investment opportunities

coming across the desk.

An unusual one that came across the desk yesterday

was a ropes business.


Ropes as in tough ropes

that they use in marine.

So, it's ropes and nets that they use in marine

and commercial-grade use.

Things that you just don't think about.

There's software that does the online booking services.

It's just an extraordinary breadth of opportunity set

that allows you to access to good investments.

I guess to your point earlier

around you as an individual member thinking about

what is the right investment for you,

Brian Parker always talks about 'sleep at night

should never be overrated'.

And if you're losing sleep at night it means maybe

it's your body telling you you're taking too much risk.

So, what would that mean, then, taking too much risk

in the context of those assets

that you were just describing for us, Liz?

Yes, it's a really great question,

and I still think back to after the global financial crisis

where my mother, like many members,

received her statement at the end of the financial year

and opened it up and realised that there was a big negative.

It had gone backwards, and she phoned me and said --

And blamed you?

(Liz laughs)

And she did, the very first question was:

should I move to cash?

That old question.

That old question.

Right at the time when equity markets

or share markets had dropped considerably.

And had she moved to cash at that time,

we all know with the benefit of hindsight

that the markets have recovered fully,

she would've locked in those losses.

So, that risk tolerance question

is a really important one upfront, to understand

what is going to make you sleep at night.

If you think that you are going to sit up at night

being terrified that your balance is going to fall

because there is share market volatility,

then perhaps you need to think through your strategy,

because the last thing you want to do

is not understand that those ups and downs

are a part of that asset class,

and lock it in at the down point.

Spot on.

I guess it's that thinking about,

well, what is this superannuation?

Where am I in my life and what do I need it -

if it's just sitting there accumulating,

to your point earlier, you've got more runway

to be able to take more risks.

But if you're in your 70s or 80s

and you're drawing down an income,

you can understand why people are worried.

They don't want their income payments to go backwards,

because cost of living is a challenge,

and equally they want the money to last.

So that potentially - I know many of our members

like to leave a legacy.

Absolutely, and that's where age comes into consideration

and thinking through what is

the right investment strategy for you personally.

If you are retired, you're not bringing in

a salary from your work anymore.

So, perhaps you need investments that are lower risk

and that are income generating.

They're the type of questions

that you need to understand.

So, how would you then, at that point, if you're

at that retirement point, and you're drawing an income,

what's the traditional type of portfolio?

How does it look in terms of allocation

to those different pots of assets

that you were talking about, Liz?

So, it can vary, and Australian Retirement Trust

has a series of different options

depending on your personal circumstances.

Because some members can have large assets externally

in addition to their superannuation fund.

So there is no one size fits all strategy.

However, Australian Retirement Trust

does have a default option.

So if you are not ...

If you're happy to just go with the default option,

meaning that you don't make a selection

of the different types of investment strategies,

the strategy that Australian Retirement Trust builds

is a diversified portfolio of opportunity

that aims to generate wealth over time,

that progressively increases its exposure

to low-risk investments as you get close to retirement.

So, things like fixed interest and cash.

Yes, and also we were talking about

some of the alternative asset classes.

Things like infrastructure, for example,

can also be in there.

They're assets that offer

essential services to society,

which means that their earnings and income

is not necessarily generated to the global economic cycle.

So, they can provide a nice diversifying return stream.

And just to give an example

of what are infrastructure assets,

things like roads, airports, utilities,

communication services.

Some of the assets that are in

the Australian Retirement Trust portfolio

that you'd be very familiar with are

Melbourne Airport, Brisbane Airport.

Gold Coast.

Well, you may have also just actually seen

the recent, a year or so ago, investment in Amplitel.

So that's the big mobile network towers.

So, they're all investments that access

to a large superannuation fund can access.

Some other options or investment types

that are available is property or real estate.

There's very broad access to assets in there as well.

I think for the members or our viewers watching,

the return, the net return, after fees

is obviously really important also,

because fees do play a role in terms of

what is the actual performance

that you're getting from your super fund.

So, what would you say, what's your advice

to our viewers and listeners around fees

and the different types of fees

for these different asset classes?

Fees do matter, so it is important to understand

what fees are being charged,

and that you are getting good value for money.

It is important to note that different asset classes

do have different costs.

So, something like those unlisted assets

that we're talking about, they do cost more to transact,

more due diligence, but the expected return

is expected to be higher to compensate you for that,

or the expected diversification benefits

are expected to compensate you for that.

And how would the fees vary between, say,

actively managed type of portfolios

versus an index approach in the shares?

And I'm talking in relation to shares.

Yeah, so in public share markets

where you have a company that is actively trying

to add value by choosing one company

or investment over another, that comes at an expense

more than if you were just replicating an index.

You need to pay for that company

to do the diligence, the time, energy and effort

to make those picks.

So, you would expect to pay a higher fee

in actively managed strategies

relative to passively managed strategies.

So, if you were to give our viewers and listeners

one bit of advice if they were thinking and looking at -

they've logged into the app, into Member Online,

and they're thinking, whether they're 25, 35, 65, whatever,

they're looking and going, 'I'm not sure.

Is this the right

investment option for me?'

If they're generally curious, what would be your ...

what would you say to them?

So, education is always incredibly helpful.

I think, like anything, at first you can get overwhelmed

by different terms not, knowing what they mean.

So, education - and I know this is going to be

right up your alley.

Private advice. It's something

you're incredibly passionate about.

But getting personal advice is incredibly helpful

because it gives you the confidence to understand

that plan that you have in place,

understand the likely ups and downs,

which will give you the confidence

to ride through that journey

and maximise your outcomes over time.

But, of course, if you do have any questions

you can call our contact centres here

at Australian Retirement Trust.

And, you know, you're right, Liz;

everyone's situation is different,

particularly the closer you get to retirement.

That's when, you know, the rubber really hits the road

about your personal circumstances.

Do you have an investment property?

Do you have other assets?

How much do you need to rely on the Age Pension?

Do you have a partner or not?

What's your health like?

How long do you need that money to last?

All of those things

will factor in to the right investment option for you.

And if you're not paying attention,

you're with a super fund that absolutely

has the best-in-breed investment professionals

like Liz here today that are pulling together

portfolios for you so that you can sleep at night,

and we are protecting your money and looking after it

so you can just live the best possible retirement.

But, Liz, I really appreciate having you on here today,

and I have to say it's wonderful to see -

I'm just going to do a shout-out because I

the investment world

has always been dominated by men.

You and I are a similar vintage,

so it's just wonderful to have

an investment professional like you

who's achieved so much.

You have a portfolio that's just extraordinary,

and you've got teenagers or young adults as well

and you sort of have this ability to do it all.

So, just wonderful to have you on Super Insider,

if I can say so.

Oh, it's lovely to be here and thank you,

and hopefully you found it helpful.

Yes, and if any of our viewers or listeners

have any questions,

we have so much content on the website,

and we have obviously lots of other investment content

on YouTube, and you can obviously download us

or watch us - or listen to us, I should say, on Spotify.

I always mess that up.

Or on Apple on that streaming podcast app

there on your phone or iPad.

So, thank you very much for joining us on Super Insider,

and we look forward to you joining us again soon.

Any advice given is provided by representatives of Sunsuper Financial Services Pty Ltd (ABN 50 087 154 818, AFSL 227867) or QInvest Limited (ABN 35 063 511 580, AFSL 238274), both wholly owned by the Trustee as an asset of Australian Retirement Trust. As representatives, they may recommend ART superannuation products when they are appropriate. Please refer to the relevant Financial Service Guides available at for Super Savings and at for QSuper. The content is provided for general information and educational purposes only, any personal views and opinions in this podcast are not necessarily the views of the Trustee.

This information and all products are issued by Australian Retirement Trust Pty Ltd ABN 88 010 720 840 AFSL No. 228975, the trustee of the Fund, Australian Retirement Trust ABN 60 905 115 063. Any reference to "QSuper" is a reference to the Government Division of the Fund. Information is correct at the time of publishing. This is general information only and does not take into account the investment objectives, financial situation or needs of any particular individual. You should consider if the information is appropriate to your own circumstances before acting on it. You should also consider the relevant Product Disclosure Statement (PDS) before deciding to acquire or continue to hold any financial product and also the relevant Target Market Determination (TMD). For a copy of the PDS or TMD, please phone 13 11 84 or go to the Australian Retirement Trust website at or for QSuper products visit or call us on 1300 360 750 for a copy.