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How Your Super is Invested

Understanding where and how your money is and can be invested can empower you to make smarter choices today to create a better future. Find out about how super investments work to help you take control of your super today.

Asset Classes

Some people think about super as a single asset, but it’s actually made up of a number of 'asset classes'. And within those asset classes are your investment options.

Types of asset classes

 

There are two key types of asset classes

  • Defensive – Cash and fixed interest, focused on generating income
  • Growth – property, equities, focused on capital growth and income

When deciding on an investment option, it might be helpful to understand the different levels of risk and returns associated with the different asset classes.

Some assets carry a higher level of investment risk than others - these are known as growth assets (e.g. shares and property). Those that are more stable are called defensive assets (e.g. cash and fixed interest).

 

Super fund risk and returns

 

Super fund risk and returns

  • Cash - Deposits in a bank, short-term loan securities and other similar investments. Considered low risk with a corresponding expectation of low returns.
  • Fixed Interest - Usually a loan to a government or business where a fixed rate and loan length are agreed to in advance. It’s a moderate risk investment. Generally less risky than property and shares over the short term, but also expected to provide a lower level of return over a longer period.
  • Property - An investment in property or developments, either directly or through property trusts. Moderate to high risk investment, due to reliance on economic factors, location and quality. Has a corresponding level of moderate to high expected returns.
  • Shares - Investments in overseas companies. Similar to Australian shares. Generally the expected return is high over the long term, but the risk is greater.

By spreading your investment among different asset classes (also known as diversification), you can potentially reduce the overall level of risk in your portfolio. Generally, it's not possible to diversify all risk but spreading your investment over a mix of assets can help smooth out the ups and downs of an investment.

 

Fund Performance

The performance of the investment option/asset class you choose will impact your final superannuation balance and how much you have when you retire. The performance of a fund depends on the investment options available and their risk profile.

Things to think about

 

Here’s some things to think about:

  • Look at the performance of your fund, and the funds you might like to move to, so you can to evaluate the performance of the investment options over time.
  • Check performance regularly as your needs change. For example, as you get closer to retirement you may want to be invested in assets that have less risk and lower growth but are more stable.
  • Performance can be hard to judge, especially because superannuation is a long-term investment. But if you’re unhappy with the performance of your super, you might need to rethink your investment strategy and options. It is also important to keep in mind that past performance is no guarantee of future performance.
 

Compare 'like with like'

 

Make sure you’re comparing your current investment options with similar options. For example, don’t compare a Cash investment option with International Shares.

Make sure the performance results you compare relate to the same periods – for example, July to June results would be different from January to December results.

 

Take a long-term view

 

Superannuation is a long-term investment. Performance can sway in the short term so consider at least a five year time frame when checking performance, as this tends to give more telling results. But keep in mind that past performance is no guarantee of future performance either.

Review the performance of Virgin Money Super.

 

Unit Prices

Units are the way we work out how much your superannuation is worth.

How a unit price is calculated

 

Unit Price = the total value of assets in the investment option less fees, costs & taxes/the number of units issued in the investment options.

  • Unit prices are calculated daily, based on the latest available market price, so they may fluctuate from day to day.
  • Your account balance is then calculated by multiplying the number of units you have by the latest unit price (at any particular time).
  • Each investment option has a different unit price, because they grow at different rates. So it’s normal for the unit prices to rise and fall.
 

What does this mean for your money?

 

When you invest in Virgin Money Super, you don’t buy actual assets - instead, the Trustee allocates you a number of units in the asset class or investment option based on the unit price on that day.

As you continue to invest money you buy new units based on the unit price of that day and so on.

Unit prices for all Virgin Money Super products are available to members from within their online account. We’re not suggesting you check the unit price every day. But it is important you understand how the unit price affects the performance of your investments to help you make informed decisions.

Find out more about the performance of this fund.

 

Considering Risk

Superannuation funds will usually give you a choice between investment options. When choosing, you might like to consider the level of risk you’d be comfortable with.

If an investment option carries a higher level of risk, it means you generally have the potential to see higher returns over the long term. It's important to note that investment options with a higher level of risk also have a higher potential to experience negative returns.

Type of risk

 

There are different types of risk that can apply to superannuation funds, they are:

Investment risk

All investments have the potential for fluctuating returns. Generally, the higher the risk, the higher the return. However the higher the risk, the higher the probability is for a negative return.

This should be your key focus when assessing funds

Market risk

This includes universal factors such as economic cycles, government policy, interest rates and inflation. Changes in these factors may result in dramatic increases or decreases in market valuations

Currency risk

The risk that movements in foreign currency will affect the domestic value of overseas investments

Legislative risk

Changes in legislation (such as superannuation and taxation laws) may affect your investment

Fund risk

The risk of your fund terminating

Liquidity risk

The extent to which investments can be converted into cash or other liquid securities without suffering a substantial reduction in value. This risk may arise in circumstances where in order to liquidate an asset quickly, it may be necessary to sell that asset at a substantial discount and have a negative impact on the overall performance of the investment

To understand the investment risk and growth prospects that can be expected from each asset class within Virgin Money Super, check out our investments. This is a great way to help you understand how your investments could build over time.

 
 
 

Important stuff

The information above is intended as a guide only. If you are unsure about who you need to make contributions for we suggest you contact the ATO.

As an employer, it's important you fully understand your superannuation obligations as failure to meet these minimum requirements could mean financial penalties from the Government.

QuickSuper is a registered trademark and a product owned and operated by Westpac Banking Corporation ABN 33 007 457 141. Westpac’s terms and conditions applicable to the QuickSuper service are available after your eligibility for the free clearing house service is assessed by Virgin Money Super.

This information is of a general nature only and does not take into account your personal financial situation, needs or objectives. As we don't know your financial needs we can’t advise if Virgin Money Super will suit you. Please consider the Product Disclosure Statement, Product Guide, Insurance Guide and Financial Services Guide before making a decision about the product. For further information about the insurance options refer to the Insurance Guide.

The Superannuation Fees described on the Fees page apply from 12 December 2016. Here you'll find the official Superannuation Industry (Supervision) Act 1993 ('SIS Act') definition for each fee type.

While there are no contribution, withdrawal or switching fees, a buy/sell spread applies at a fund level when purchasing and selling units. Other fees and costs may apply such as insurance fees. These are retained by the fund and are not paid to Virgin Money or the Trustee. All fees are inclusive of Goods and Services Tax (GST) and net of Reduced Input Tax Credits (RITC).

Before you rollover or consolidate your superannuation, you should check to see if insurance or other benefits will be impacted or lost. Some funds may also charge withdrawal or exit fees.

It is very important to note that superannuation is generally a long term investment. Past investment performance is not a reliable indicator of future performance and should never be the sole factor considered when selecting a fund. It is very important to note that superannuation is a generally long term investment and that past performance is not indicative of future performance.

Prepared by Virgin Money Financial Services Pty Ltd ABN 51 113 285 395 AFSL 286869. Virgin Money Super is a plan in the Mercer Super Trust ABN 19 905 422 981. Virgin Money Super is issued by Mercer Superannuation (Australia) Limited (MSAL) ABN 79 004 717 533 AFSL 235906 as trustee of the Mercer Super Trust. For more information about Virgin Money Super, please refer to the PDS which is available free of charge on our website or by calling the Customer Care team on 1300 652 770.

Source: https://www.ato.gov.au/About-ATO/Research-and-statistics/In-detail/Super-statistics/Super-accounts-data/Super-accounts-data-overview/

SuperRatings award reflects a funds' value for money, and is awarded based on a rating system of investment, fees and service. SuperRatings does not issue, sell, guarantee or underwrite this product. Go to www.superratings.com.au for details of its ratings criteria.

The amount shown is an estimate only of the Indirect Cost Ratio (ICR) generally expected to apply to these investments for 2016-2017 Financial Year.

Virgin Money Super’s fund returns shown above are net earnings and are calculated after the deduction of applicable taxes and costs. The results are current as at 31 January 2017. These results are provided by Virgin Money Super Asset consultants. It is very important to note that past performance is not indicative of future performance.

The median results are provided by SuperRatings and are current as at 30 June 2016 as a benchmark only. Virgin Money Super has not verified its accuracy so we can’t guarantee that it is correct, and accept no liability for inaccuracies, errors or omissions.

Eligibility crtieria and fees apply. Aged 15-64 Death and Total and Permanent Disablity cover. Automatic Insurance cover is subject to Exclusions including Pre-Existing Medical Condition exclusion. This means that, you won’t be covered for any illness, injury, condition or related symptom that you were aware of or should have been aware of, or had a medical consultation for, were planning to have a medical consultation for, or should have had a medical consultation for in the two years prior to cover commencement. See the Virgin Money Super Insurance Guide for more information.

Automatic Death & TPD cover for Australian residents aged 15-64 with our default insurance offering. Conditions and Exclusions (such as pre-existing medical conditions) apply. See the Virgin Money Super Insurance Guide for more information.

The case studies shown are hypothetical and are not meant to illustrate the circumstances of any particular individual. All claims will be assessed in accordance with the policy terms. In the event of any inconsistency with other material, the insurance policy terms will prevail.
For further information regarding Virgin Money Super’s insurance cover, including terms, conditions and eligibility, please refer to the Insurance Guide which forms part of the Product Disclosure Statement (PDS). The PDS is also available free of charge by contacting Customer Services on 1300 652 770.
This information is of a general nature and has been prepared without taking account of your personal needs, financial circumstances or objectives. Before acting on this information, you should consider the appropriateness of the information, having regard to your needs, financial circumstances and objectives. You should read the relevant Product Disclosure Statement available by calling 1300 652 770 and consider if this product is right for you before making a decision to acquire or continue to hold the product.