Four most common investment options
ASIC has consulted licensed actuaries to estimate what returns would be reasonable over the long term for four of the most common investment options used by super funds and professional investment managers. These estimates are for returns before any money's taken out for fees and taxes.*
| Investment option | What it roughly means | Acceptable
rate range |
Growth
70–80% in shares or property | Aims for higher returns over the long term and so risks higher losses in bad years. | 8%–9% |
Balanced
60–70% in shares or property, the rest in fixed interest and cash | Aims for reasonable returns, but less than growth funds in order to reduce risk of losses in bad years. | 7.5%–8.5% |
Capital stable
60–70% in fixed interest and cash (some invested in shares or property) | Aims to reduce risk of loss and therefore accepts a lower return over the long term. | 5.5%–6.5% |
Capital guaranteed
By law, invests 100% with Australian deposit-taking institutions or in a capital guaranteed life insurance policy | Guarantees your capital and accumulated earnings cannot be reduced by losses on investments. | 5%–6% |
*Our licensed independent actuaries consulted a variety of sources including assumptions used by industry groups, leading asset consultants and publicly available survey data about superannuation fund investment strategies.
We suggest you discuss what investment risks you are prepared to take with a licensed adviser.
Our alert on high yield investment schemes describes a recent scheme in Brisbane.
Investing for high returns - watch out!
How to understand rates of return
FIDO Website: Printed 11/20/2008
