How to choose an investment option

Published 24 November 2020

The choices you make for your superannuation investments today can make a difference to your future lifestyle in retirement.

Superannuation funds such as LGIAsuper offer 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.

If you are like most people and haven’t chosen an investment option, the money in your superannuation will automatically be invested in a default option.

  • If you have an LGIAsuper Accumulation account, our default option is MySuper Lifecycle which aims for higher returns when you’re aged under 75 years, before investing more conservatively from your 75th birthday.
  • If you have an LGIAsuper Pension account, our default options are Diversified Growth (if aged under 75 years) and Balanced (if aged over 75 years).

There may be times in your life you want to choose a different option, and you can do this any time. This article explains investment options and what you may need to consider when choosing them.


What is an investment option?

An investment option describes how you would like your superannuation to be invested. It outlines the investment aims, types of assets being invested in, and the risk levels.

LGIAsuper has a range of investment options to choose from. We have investment options for different financial situations and goals.

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

For example, the allocation of assets within our MySuper Lifecycle option, which is used by most of our members, are listed below.

MySuper Lifecycle Under 75

  • Growth assets: 70%
  • Defensive assets: 30% 

Asset classes Allocation %
Australian Shares 22.5
International Shares 27.5
Private Capital 5.0
Property 9.0
Infrastructure 11.0
Diversifying Strategies 5.0
Diversified Fixed Interest 18.0
Cash 2.0

MySuper Lifecycle 75 plus

  • Growth assets: 50%
  • Defensive assets: 50%

Asset classes Allocation %
Australian Shares 13.5
International Shares 16.5
Private Capital 5.0
Property 9.0
Infrastructure 11.0
Diversifying Strategies 5.0
Diversified Fixed Interest 37.0
Cash 3.0

Investment options are classified as conservative, growth or balanced. 

  • Conservative options have a lower level of risk, 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 has a range of investment options to cater for everyone. 

You can build your own investment strategy or choose from one of our ready-made 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 Lifecycle – this is our default option. When you are aged under 75 years it invests more in growth assets and aims to achieve higher returns. From your 75th birthday, it invests in a more balanced allocation of assets.
  • Aggressive– for members seeking high returns and prepared to accept potentially significant fluctuations in returns over shorter time periods.
  • Diversified Growth – for members seeking reasonably 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 high returns.
  • Australian Shares – for members seeking high returns.
  • Property – for members seeking moderate to high returns.
  • Diversified Fixed Interest – for members seeking modest returns.
  • 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 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 high returns (from Australian shares only) and prepared to accept potentially significant fluctuations in returns over shorter time periods.

Choosing an investment option

If you are choosing your own 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 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 receive lower returns.

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


Asset classes explained

As above, within each investment option is one or more asset classes. An investment option’s level of risk and expected returns is dependent on its asset class allocation.

LGIAsuper invests in the following asset classes:

  • Shares – also known as stocks or equities.
  • Diversified Fixed Interest – examples include government and corporate bonds, and they pay regular interest and mature on a specified date.
  • Cash – this is money held on deposit with a bank or in money-market securities.
  • Property – assets such as offices, shops and factories can provide returns from both income and capital growth.
  • Infrastructure – large investments such as roads, railways and airports.
  • Private Capital – this is our newest asset class, where we make debt or equity investments into private companies or related investments. Examples include distressed credit, emerging private equity, value add investments in property and infrastructure, and agricultural assets.
  • Diversifying Strategies – these investments can provide diversification benefits within a broader portfolio. Examples include hedge funds, insurance-linked strategies, relative value fixed interest strategies, global macro investments and tail risk hedging. Diversifying Strategies is our new name for the Alternative Assets option (from November 2020).

Asset classes are regarded as either growth (such as shares, property and infrastructure) or defensive (such as fixed interest and cash).


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, such as salary sacrificing and choosing an investment option, at no additional cost.

More comprehensive financial advice is also available, for which fees will vary depending on the type and complexity of advice.

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 for different types of account:

Further information is also available at lgiasuper.com.au/investments.


* LGIAsuper has engaged Industry Fund Services Limited (IFS) ABN 54 007 016 195 AFSL No 232514 to facilitate the provision of financial advice to members of LGIAsuper. LGIAsuper Financial Advisers are Authorised Representatives of IFS.

Learn more

Watch our online tutorial to explore this topic further:

Superannuation investments