What Should I Be Investing in With My Self Managed Super Fund?

Investment Articles > Article: Part 2: What Should I Be Investing in With My Self Managed Super Fund?

There are many different types of superannuation funds in Australia today. It is hard enough to understand mutual funds. Once you figure out what mutual funds are, then you have to understand how they work with respect to superannuation funds. If you are familiar with retirement planning however, you will soon realize that none of this is too complicated.

There are many types of superannuation funds to invest in, just as there are many types of mutual funds to invest in. Before you decide what the best type of self-managed superannuation mutual funds in Australia are to invest in, you have to understand what types of superannuation funds exist.

Types of Superannuation Australian Funds

There are more than 300k superannuation funds operating from Australian today, and the assets of those funds total more than 50 million dollars. That is a lot of money.

Investors have six primary superannuation funds to select from when considering where to place there money. Here is a brief summary of those choices:

  • Industry Funds - These are funds provided by many different employers that unions and associations put together. They are in place only for members of these organizations.
  • Retail Trusts - Sometimes co-aligning with Wrap platforms, these funds are offered to individuals and offered primarily by banks or other lenders in the financial services industry.
  • Wholesale - These trusts typically involve multiple employer funds offered for various groups of employees.
  • Employer Stand-Alone - These funds typically are for employees working for specific employers, and only for the employees of these employers.

What to Look For In a Self-Managed Superannuation Fund

Here are some things you can look for so you know how to pick a great self-managed fund. You should always consider the fee structure of the fund. Management fees are one thing to look at. You might for example, pass up one fund because of a 1 or 2% difference in management fees or administrative fees. While this may not seem like a big deal initially, these fees can be quite high yearly.

These fees could actually result in a very big percent of your total retirement profits in the long-term. Your total loss may be closer to 25% of more in the longer-term. If you calculate that percentage in dollars and cents it may equal thousands of dollars of your retirement income. Why should you give that up because of a poor decision made years prior to your retirement?

What comprises the optimal fund? That really depends on the individual. There is no one right or wrong answer. Some people want funds that offer high returns. Since this is a retirement fund, the best fund may not involve high risk alternatives however. The best combination may be a diverse fund one that incorporates a combination of high risk and low risk funding options.


Because you want to build enough money over time to make your investments worthwhile, without losing too much money in the process. A balanced mutual fund will allow you to realize a steady rate of growth without compromising your stability. You can enjoy some risk, and some conservative investments that will stabilize a loss should it occur.

You should also look for the following when considering self-managed funds: the growth of the fund, whether it is balanced and whether the capital source is stable. Growing funds typically invest in property and shares as these are higher risk funds and tend to yield higher results. If that is what you are after then these are a good option. A diverse choice or balanced strategy however, may be more appropriate, one that has an equal balance of higher returns and lower more stable returns. These might include cash and Australian fixed interest investments.

Stable investments involving capital may include Australian fixed investment and cash investment. They may involve very little if any investment in property which tends for the most part to be very conservative.

The how of investing your capital is a critical decision you have to make when self-managing your funds. One of the most important decisions you will make is when and where you will put your investment. It is important you take time to watch and research funds that you plan to join so you know them in and out, as well as a worn pair of jeans.

You can also research your fund by visiting the Australian Government Securities and Investments Commission to learn more.

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