Investments

Security, stability, low cost

Superannuation investments thrive on long-term management in the right environment.We have the right economies of scale, strategies and fund managers to help your investments reach their full potential while minimising risk.

 

Frequently asked investment questions

What’s the right investment option for me?

What’s the right investment option for me?

The investment option that’s best for you depends on what stage in life you are at and how much you’re willing to see your balance go up and down. As a rule of thumb, younger people may be able to take on more risk as they are investing for a longer time period, while people nearing or in retirement may not want to take on as much risk as they will be accessing their super sooner.

The best way to ensure that you are in the right investment option is to discuss your risk profile with a financial adviser. They will be able to recommend the option that’s best suited for you. To book an appointment with a Vision Super financial planner, complete the online form or call the Contact Centre on 1300 300 820 (Monday to Friday 8:30am to 5pm) to arrange an appointment. Advice on certain single superannuation issues like your investment option can usually be provided at no cost to you.

How do I work out my risk profile

How do I work out my risk profile

Everyone’s tolerance to risk is different and often changes as we progress through life. The best way to work out your risk profile is to have a discussion with one of our financial advisers. They will go through a questionnaire, which will help determine what amount of your money should be allocated to growth investments such as shares and property, and what amount should be allocated to defensive investments like cash and fixed interest. They will then discuss your investment options and provide you with a set of recommendations.

If you’re not familiar with how investment markets behave and the economic influences on them, you should seek the advice of a licensed financial planner. A licensed financial planner can help you to work out your goals and the right balance of risk and return for you in the context of your personal circumstances, goals and risk tolerance. To book an appointment with a Vision Super financial planner, complete the online form or call the Contact Centre on 1300 300 820 (Monday to Friday 8:30am to 5pm) to arrange an appointment. Advice on certain single superannuation issues like your investment option can usually be provided at no cost to you.

Where can I find the latest investment option returns?

Where can I find the latest investment option returns?

The latest monthly investment returns for the Vision Super investment options are available here

These investment option returns are shown after investment fees and costs have been taken out, and for super plans, after tax has also been taken out. Returns may go up and down, so past returns are no guarantee of future performance.

What is the difference between the premixed and the single sector investment options?

What is the difference between the premixed and the single sector investment options?

Premixed options are made up of multiple asset classes, like shares, property, cash and bonds, while the single sector options are made up of a single asset class. This means the premixed options are more diversified than the single sector options.

Diversification is a method of reducing investment risk. It means spreading your investments both across and within asset classes. The principle is that the more you diversify, the less risk you have that a single asset performing badly means your whole return is poor or negative. It’s important to understand that all investments have some level of risk, and you can never diversify away market risk, which is risk that affects the whole market. Our premixed options provide a degree of diversification across asset classes and the underlying investments. By their nature, single sector options are not diversified across different asset sectors but do employ diversification in the underlying investments. The Innovation and disruption option is the least diversified of our options, because its focus is on a small number of companies that use technology in an innovative way or disrupt their industry.

You can invest in one or more of our premixed options, each with asset allocations determined by us. Or if it suits your investment plan, you can also choose your own asset allocations using our single sector options, or invest in a combination of premixed and/or single sector options.

Please refer to the relevant Vision Super Product Disclosure Statement for more information about the risks of investing in superannuation available on our Publications page under Product Disclosure Statements.

 

What investment fees do you charge? And what do they cover?

What investment fees do you charge? And what do they cover?

The investment fee includes all investment expenses relating to the investment management of Vision Super’s assets. It includes management fees paid to investment managers and advisers that are a percentage of the assets they manage plus, in a very few cases, fees that depend on the performance of the product. Also included in the investment fee are management fees charged by investment vehicles, explicit transaction costs incurred by investment managers, investment advice consulting fees, bank fees, custodian fees and internal Vision Super costs related to the management of the fund’s investment assets.

Investment fees are not deducted directly from your account. The investment fee is an indirect fee that is deducted from the investment option unit prices. Investment fees are therefore reflected in the returns allocated to your account through changes in the unit prices.

Please refer to the Fees and costs – additional guide for more information about the current investment fees for each option on our Publications page

How do you factor climate change into your investment decisions?

How do you factor climate change into your investment decisions?

We take our responsibility as a long-term investor very seriously. The long-term prosperity of the economy and the well-being of our members depends on a healthy environment, and good governance within our day to day operations and the companies we invest in. We also believe that environmental, social and governance issues and sustainability considerations are important within the context of optimising net risk-adjusted returns for our members.

Vision Super considers ESG risks to be material risks that have the potential to affect the interests of our members. Climate change is one of the primary risks we take into account in investment decision-making. We’re committed to managing the risks and taking advantage of the opportunities associated with climate change. The carbon intensity of our portfolio is considerably lower than that of the market as a result.

We require our investment managers to take the principles of long-term ESG investing into account and to integrate sustainability research into the portfolios that they manage. In the course of conducting their research on companies to invest in, our investment managers look at how climate risks may affect a business’s long-term value. Their investment criteria tend to lead them to high growth companies that typically operate in less carbon-intensive industries. Our active fund managers are also required to factor in a transition in line with the Paris goals of keeping climate change to 1.5C above pre-industrial levels, and we regularly engage with them on how climate risks are factored into the assessment of particular portfolio positions.

Our passive indexed Australian and International equities portfolios are managed against a low carbon benchmark. The “passive indexed” means that these portfolios have been constructed to closely mimic the performance of a market index. These portfolios are also “managed against a low carbon benchmark”, which means that the amount that is invested in each company will vary depending on their relative carbon emissions. So these portfolios invest less in companies with high carbon emissions and more in companies with low carbon emissions, and this results in these portfolios having less carbon emissions than a similarly sized pure index portfolio would emit.

Vision Super will not invest at all in some products that we consider particularly damaging and high-risk. Currently, we don’t invest in companies that derive material revenue from the manufacture or production of tobacco, controversial weapons such as land mines, cluster bombs and nuclear weapons, and the mining of thermal coal and tar sands.

We are very active in exercising our shareholder votes. We believe that engagement, rather than divestment, is the most effective strategy to improve the way companies operate, reduce environmental impact and increase transparency. By applying the voting power that comes with owning listed equities, we can encourage companies to do better.

Vision Super is a signatory and member of a range of organisations that promote responsible investing in the superannuation industry, including the Principles for Responsible Investment (PRI), the Australian Council of Superannuation Investors (ACSI) and the Responsible Investment Association Australasia (RIAA). We are also a signatory to the Global Investor Letter to governments on Climate Action, the Paris Pledge for Action (Paris Climate Change Agreement), the Workforce Disclosure Initiative (WDI) and a support investor of the Climate Action 100+ initiative.

For more information about our sustainable investment activities visit:

Sustainability

Active Ownership

What is compound interest and how does it work?

What is compound interest and how does it work?

Compound interest is the interest that is earned on money that was previously earned as interest.

For example, if you have an investment of $100 that pays interest of 5% every year, then in the first year you will be paid interest of $5 over the year (5% of $100).

What happens in the next year? That’s where compounding comes in. You will not only earn interest on your initial $100 deposit, you will also earn interest on the $5 interest that you earned in the first year.

That means you will earn $5.25 in the second next year because your account balance is now $105, even though you didn’t make any deposits. This may not seem like much of an increase, but compounding is more dramatic over long periods. After 30 years, your initial $100 investment would be worth $432.19, and that year you would be paid $21.61 in interest.

Each year your interest earnings will accelerate even more due to compound interest. This cycle leads to interest and account balances going up at an increasing rate, which is sometimes known as exponential growth.

Of course, if you’re borrowing money, compounding works against you. You owe interest on the money you have borrowed, and so your loan balance can then increase over time, even if you don’t borrow any more money.

What is the difference between growth and defensive assets?

What is the difference between growth and defensive assets?

Generally speaking, growth assets are higher risk and higher reward investments that focus on capital growth, while defensive assets are lower-risk and lower-reward investments that focus on generating income.

The classification of assets into either growth or defensive has the advantage of simplicity, but it also has limitations when used as an indicator of risk. The classification does not capture diversification, which can have a large impact on reducing the overall portfolio risk when assets are combined.

Another issue is that different people may have different classifications for the same asset type because there are no regulations governing this area and no clear guidance by the regulators on a standardised growth/defensive split. Classifications of growth or defensive assets may also change over time depending on market conditions and pricing.

We believe that there needs to be a greater consistency and transparency in how super funds arrive at their growth/defensive mixes. But in the absence of regulations, there are going to be differences in practice and opinion. To avoid any potential misunderstandings, Vision Super therefore does not publish the growth/defensive split of our investment options.

When should I switch investment options?

When should I switch investment options?

We do not charge switching fees, so there is no impact on your super account balance from switching between investment options. However, if you have the right investment risk profile and your investments are matched up to your risk profile, you should not be needing to make switches regularly. From time to time you should review your risk profile, maybe when you are first starting out in the work force, are in the middle of your working life, a few years away from retirement or going into retirement. Otherwise the investments you have in superannuation should be a ‘set and forget’ strategy where you ride the ups and downs of the investments over a longer period. 

You can switch investment options for some, or all, of your account balance, future contributions or both. You can also nominate which investment option you would like your withdrawals to be made from. You can switch between investment options by logging into our website, or on the Vision Super app, or by sending us a completed Investment choice form or by calling our Contact Centre. Investment switches are processed based on the unit prices of the relevant investment options declared on the next business day after we receive your switching request, unless there is a delay with processing due to abnormal market conditions or system failure.

Frequent switching between investment options and trying to second-guess the market can be risky, particularly for high-risk investment options designed to be held in the long-term (6–12 years). You should switch only after a thorough review of your long-term investment strategy.

We recommend that you obtain financial advice before making any decisions about switching between investment options. To book an appointment with a Vision Super financial planner, complete the online form or call the Contact Centre on 1300 300 820 (Monday to Friday 8:30am to 5pm) to arrange an appointment. Advice fees may apply which will be discussed with you before any work will be undertaken.

Who should invest in a cash option?

Who should invest in a cash option?

Cash investment options are generally a combination of money in the bank and money invested for a short time in money market securities such as bank term deposits and bank bills.

If you are risk averse or working to a short timeframe, then a Cash option that typically provides stable, low risk returns may be suitable for you. This type of investment option will protect the value of your superannuation, but the returns will often be low compared with other investment options.

The risk associated with cash investments is generally minimal, although the returns are also minimal. Cash can be a safe haven in times of economic uncertainty and occasionally you may wish to preserve capital by allocating some of your super to cash.

We recommend that you obtain financial advice before making any decisions about investing in our Cash option. To book an appointment with a Vision Super financial planner, complete the online form or call the Contact Centre on 1300 300 820 (Monday to Friday 8:30am to 5pm) to arrange an appointment. Advice fees may apply which will be discussed with you before any work will be undertaken.

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