How, when and why to change your investment option

If you don’t know much about investing it can seem daunting to even think about what your super should be invested in.

“Fortunately, super is designed for you, so if you want to keep it simple you can choose one option that will fit your long-term goals and objectives; or to be more involved, you can look into a range of options determining what the right choice is for you,” explains smartMonday senior smartCoach Johnny Ng.

Before we start, you may like to run through our quick guide to smartMonday’s investment options where we explain our different investment categories and how they work.

Essential points

• Log in to your online account to review your investments

• Think through the change you want in your super

• Focus on what’s right for your life stage and the returns you want

• Change your option in your online account or by filling out our form.

To refresh your memory about your current investments log in to your smartMonday online account and you will see an ‘investment options’ heading under which are listed the option(s) you’re invested in.

Within your account you will be able to see how those options are performing. For further explanation you can review the latest investment performance article on the smartMonday smartHub (just scroll down the page until you get to the ‘Investing’ heading).

And for a full picture of returns across all our options visit our investment returns page (click the latest entry to open a PDF file where our options and their performance over various time periods are listed in a table).

“There are a few reasons you may decide to change your investments: Do you want your super to be simpler? Do you want higher returns? Do you want to invest in particular assets? Or do you want your super to be safer? In short, what do you want to achieve by switching your investment choice?”, asks Ng.

Want to make it simple and easy to manage? Our most popular option is MySuper. This option adjusts as you age: higher risk when you’re younger to maximise returns, lower risk as you age to preserve what you have. It’s called a ‘lifecycle’ approach because it’s designed to adapt to different life stages. It particularly suits those who want to be less involved in their super.

Want higher returns or to keep your super safe as possible? Then look at our investment returns page. There you can review the performance of each option for up to seven or 10 years. Pay attention to the first column in those return tables, ‘Growth assets %’, as the higher figure indicates an option with more risk and potentially more return, while a lower growth assets figure means less risk but potentially lower return. (Consideration around risk is deeply connected to life stage and age – see below.)

You’ll notice that our investment performance tables are split into two sections: pre-mixed options (based on their level of risk) and sector options (based on particular assets such as shares or property). We also have detailed lists of what each option is invested in if you want to know.

“If you’re confident in your investment knowledge you may be inclined to pick one of those pre-mixed or sector options, eg growth, defensive, international shares, or cash. You can also split super between a number of options (it doesn’t all have to go into just one). It’s important to think through what it is you want to achieve, what level of risk you’re comfortable with, and what options will help you get there. Our article, Building wealth is all about risk, can give you some useful background here,” says Ng.

Keep in mind the investment performance you see in our returns tables is past performance and is not a reliable indicator of future performance. It is also advisable to speak with a financial adviser or a smartMonday smartCoach if you feel you need guidance.

When people don't get the returns they think they should, they think about switching investment options. But be careful, as super is a long-term investment and switching due to short-term considerations is usually not wise.

Age is usually the guiding factor affecting investment choice. When you’re younger, investing in riskier ‘growth’ assets can be a good way to achieve returns and build your super.

“The concern is that if investments drop in value you can incur losses, so when you’re older you may want to think about how to preserve what you have by choosing less risky options,” says Ng.

Returns are a main reason people change their investment option – often because they’re not getting the returns they think they should. And it may very well be. But bear in mind that super is a long-term investment and switching investment choice due to short-term consideration is usually not wise. We explain the issues to think through in our article If your super has fallen, what should you do?

“It’s really important to note that people often switch to a ‘safer’ investment option when their investments fall in value and they’re not seeing the returns they want. But you can really lose out that way by not switching back in time,” adds Ng. “That means, it can be better to simply stick with your original option and ride out the rough patch.”

For example, many Australians reacted to the falling sharemarket (driven by the Covid pandemic) in early 2020 by switching their super to ‘safer’ options. But they delayed switching back when the sharemarket rebounded, missing out on those gains, ending up worse off than if they’d done nothing.

“After you’ve checked what you’re invested in and how it’s performing, thought through what you’d like to see change and decided what investments are right for you, possibly with some advice, then you’re ready to take action,” says Ng.

It’s quick and easy to change your investments by logging into your account and selecting the investments you’d like to invest in. Alternatively, you can complete our Switching investment options form and send that to us. If you make a new investment choice, it will generally be completed within five business days.

Keep in mind that different options have different fees. You can find out more about the fees and costs in the investments section of the website.

1. Log in to your account to review investments and performance. Check out investment returns for all options on our dedicated webpage.

2. Consider speaking with a smartMonday smartCoach or your financial adviser about any change to your investment option.

3. Download our switching investment options form if you want to make a change.