Find answers to your investment questions.
Investing means your money’s being put to work to grow in value and/or earn you income. You can invest in a range of assets. For example, you’re invested in property if you’re paying off your home. And you’re invested in cash if you’re earning interest from a bank account. Investing in shares (or equities) means you own a part of a company. And if you’re invested in bonds, this usually involves you lending money to the government or a company for a specified length of time for the purpose of earning a return.
An asset is something you invest in, like property, shares, bonds, or putting cash in the bank. So a group of ‘property’ investments form an asset class, and so do a group of ‘shares’, and so on. Assets usually fall into two main categories: defensive and growth.
Defensive assets are typically less risky and more stable over the short term, but tend to produce lower returns over the long term. Cash and Fixed Interest are examples of defensive assets.
Growth assets are typically higher risk and more volatile in the short term, but tend to produce higher returns over the long term. Shares and property are examples of growth assets.
We invest your money across five main ‘types’ of investments (or asset classes): Cash, Fixed Interest, Direct Property, Alternatives and Shares.
Of CareSuper’s 13 investment options, some are single asset classes, such as Property, while others, such as the Balanced option, invest in multiple asset classes.
A ‘return’ is the amount of money an investment earns or loses. It’s usually expressed as a percentage. For example, if you’re invested in the Balanced option and this option returns 9%, then the total value of your super account will increase by 9%.
The net investment return represents the returns you get from your investments after all investment-related fees, costs and taxes are taken into account. That is, the impact of your investments on your account balance.
All investments come with risk, which can be short term or long term.
Short-term risk is the potential for your balance to go up and down in value over time. If the returns from an investment are likely to change a lot over the short term, it is called a ‘high risk’ or ‘volatile’ investment.
If the returns are fairly consistent and don’t change much over the short term, it’s called a ‘low risk’ or ‘stable’ investment.
Long-term risk can include things like not having enough money in retirement or your savings not keeping pace with inflation.
To learn more about different types of investment risk (e.g. inflation, liquidity, financial loss etc.) refer to your Investment Guide.
With investing, you have to give something to get something. This is called the risk and return trade-off.
Investments that give you higher returns also tend to be riskier over the short term. Time [and diversification] is often the answer to this volatility. Investments that carry less risk usually provide more stable returns. However, they may not perform strongly enough for you to save as much as you need for the future and may not outpace inflation.
Different investments come with different levels of risk. It comes down to choosing the investments that align with your goals.
Diversification means spreading your money across different asset classes, securities and locations [so that not all your eggs are in one basket] in order to help you ride out the ups and downs of financial markets.
Inflation is the price increase of goods and services in the economy. It’s usually measured by movements in the Consumer Price Index (CPI). Increases in inflation erode the purchasing power of money – meaning it costs more to buy the same thing than it used to. By the time you retire, for example, your day-to-day living costs generally will be higher than they are today. CareSuper’s investment options have objectives that include matching or exceeding CPI, so your investment continues to hold its real value.
The Standard Risk Measure (SRM) helps you compare investment options by the expected number of negative annual returns over any 20-year period:
|Risk Band||Risk Label||Estimated number of negative annual returns over any 20 year period|
|1||Very Low||Less than 0.5|
|2||Low||0.5 to less than 1|
|3||Low to medium||1 to less than 2|
|4||Medium||2 to less than 3|
|5||Medium to high||3 to less than 4|
|6||High||4 to less than 6|
|7||Very high||6 or greater|
But keep in mind that the SRM is only one measure of investment risk. For example, it doesn't show the potential size of a negative return or take into account fees or tax (if any).
We review the SRM for our investment options regularly and update them if there’s a material change to their underlying risk and return characteristics.
If you need help deciding which options are right for you, and the level of risk and potential loss you’re comfortable with, you can talk to one of our financial planners over the phone at no extra cost. (Excludes advice on the Direct Investment Option.)
We don’t charge a switching fee to change your investment option. A transaction cost for buying and selling investments (known as the buy/sell spread) may apply. This fee varies between the investment options and can be found in Fees and other costs.
It’s possible you’ll need to change your investment option a few times during your lifetime, in response to changes in your personal or financial circumstances. For example, if you want to grow your super so you have higher income later, you may reorganise your investments to try and achieve this new financial goal.
Remember, super investments are about the future, so long-term thinking is key. Generally, you should avoid constantly switching options to chase short-term returns, because you risk locking in your losses and may wind up with less overall.
By making an informed decision and sticking to your choice, you’re more likely to receive higher investment returns over the long term. So, before you decide to switch, make sure you’re doing it for the right reasons.
Don’t know if you should change investments? Contact us for help.
Already put in a switch request and want to change your instructions? Call us on 1300 360 149, so we can walk you through the process. You cannot cancel an investment switch through your online account.
The date your requested change becomes effective will depend on when we receive it. Online change requests received by midnight (AET) on a business day and changes over the phone received by 8pm (AET) on a business day are usually processed using the unit price effective at close of markets the following business day. A ‘business day’ is defined as Monday to Friday excluding national public holidays.
Switch requests received on weekends or national public holidays will be regarded as being received on the next business day and will receive the unit price for the business day following. For example, if we receive a switch request on Saturday the unit price effective Tuesday will usually apply).
Your investment switch will generally be visible on MemberOnline within three business days after we receive your request.
We believe that true sustainable investing is a long-term investment approach that takes into account the environmental, social and governance (ESG) factors of the companies we invest in. For more information, visit responsible investing.
Divesting doesn’t take into account the complexity of environmental, social and governance (ESG) issues, for which solutions are often difficult and uncertain. Instead, we believe actively engaging with companies about ESG factors, and having our investment managers consider these issues as they arise on a case by case basis, can lead to positive change. If we divested, we would lose the opportunity to be a force for this change.
Yes, we have adopted a policy to exclude tobacco manufacturers from all global and Australian share portfolios and most other investments.
We believe tobacco warrants special consideration as there is no safe level of consumption.
We consider environmental, social and governance (ESG) factors for every investment option, because we believe making sustainable choices ultimately benefits everyone.
The Australian and Overseas shares in the Sustainable Balanced option are looked after by specialist ESG managers who apply an ESG ‘filter’ to their decision-making.
With our Direct Investment Option (DIO), you can choose your own investments in the S&P/ASX 300, ETFs and term deposits to suit your investment needs.
We’ve created and follow a Responsible Investing Policy. This outlines how we manage environmental, social and governance (ESG) risks, including climate change.
We integrate these risks into our investment process across all 12 Managed and Asset Class options. We also require our investment managers to do the same when they’re selecting new investments or reviewing existing ones.
We also collaborate with some organisations to use our influence as a force for positive change. You can read more about this under Responsible investing.
The DIO gives you choice and control over your super investing. Choose from ASX300 shares, ETFs, Listed Investment Companies (LICs) and term deposits using our online trading platform. The DIO can be combined with any other CareSuper option.
You’ll need to register for the DIO to open a cash transaction account, which works like an online bank account. You then transfer money from your other CareSuper investment options into this account and use your super to invest.
You can also do the reverse and transfer money from this transaction account back into your other CareSuper investment options.
A monthly administration fee and brokerage fees apply. You can find out more about the fees for investing in the DIO on our Fees page.
You can invest in the DIO if you:
- Are a super member or full pension member
- Have at least $10,000 in your CareSuper account
- Have at least $3,000 invested in your other CareSuper investment options
- Maintain a minimum balance of $500 in your cash account.
Easy – simply log in to your CareSuper account and select the DIO link from the ‘Investments’ tab. Then follow the prompts.
Once you’ve registered, we’ll email you instructions on how to access your account.
If you haven’t set up your online account yet, you’ll need to register with your email address.
A corporate action is an action taken by a publicly listed company relating to its securities. Often, corporate actions provide investors with different options, so each investor can elect the option they believe is best suited to their personal circumstances (an ‘elective’ corporate action). Other corporate actions simply occur (these are called ‘mandatory’ corporate actions).
When a listed security you hold through the DIO is affected by a corporate action, CareSuper reviews the action and sends you an email detailing any corporate action that you can elect to participate in. An example is share buybacks.
Corporate actions such as voting at Annual General and Extraordinary Meetings are not available through the DIO.
The DIO works a bit differently to our Managed and Asset Class investment options. The returns credited to these options are net of any tax, meaning an allowance for tax has already been made.
With the DIO, each trade will incur either a capital gain or loss that could result in a tax liability. To find out how tax is applied to the DIO, you’ll need to read the Investment Guide.
Since investment returns for your CareSuper pension are tax-free, no tax applies to any investments you hold in the DIO. So you won’t incur a tax liability or credit for any tax on earnings, interest or any other income, capital gains or losses, and foreign tax offsets won’t apply. You will receive the benefit of franking credits. Please read the CareSuper Pension Guide PDS for more information.
Yes, you can directly transfer your existing DIO investments from your CareSuper account when you start a CareSuper pension. So, there’s no need to sell your DIO investments and buy them again.
To transfer your DIO investments, you’ll need to complete the application form in the Pension Guide PDS. We’ll process your transfer as part of your new account set-up.
(Keep in mind, you can’t have more than 80% of your pension investments in the DIO. Read the Pension Guide PDS for all terms and conditions.)
No. Unit prices do not apply to the DIO. This is because the value of these investments is determined by the market price of any listed securities and/or the amount held in any term deposit less any adjustments for fees, taxes etc.
Unit pricing is generally considered best practice in the financial services industry when it comes to calculating account balances. We use it to calculate your balance and to allocate investment returns in our Managed and Asset class investment options.
When you invest in one of our Managed or Asset class investment options, your money is placed in a pool of assets, along with the money of other members who’ve invested in that option. The investment pool for each option is broken up into units, and every unit you hold represents your share of the investment option. Those units have a value (or ‘price’), which we calculate by dividing the total value of the assets and liabilities in the option by the number of units on issue. At CareSuper we refer to this price as the ‘mid price’.
The value of your investment in a particular option is the number of units you hold in that option, multiplied by the sell price of the unit.
For example, if you invest $100 in the Balanced option when it has a buy price for units of $10, you will receive 10 units. If when you’re ready to leave the option it has a sell price for units of $20, your 10 units will be worth $200. The growth is your positive return.
Similarly, if you invest $100 in Australian Shares when it has a buy price for units of $10, you will receive 10 units. If the sell price for units drops to $8, your investment is now worth $80. This is called a negative return.
Every time you invest money in an option (e.g. by contributing to your super or switching into an investment option), you buy units at the buy price for that option. When you leave an option (e.g. by withdrawing money from your super or switching out of an option), you sell units at the sell price for that option.
A buy–sell spread represents the estimated transaction costs incurred when buying or selling the underlying assets in an investment option. Buy-sell spreads are applied to the mid-price to determine the buy price and the sell price. These spreads are applied to ensure that all transaction costs incurred by issuing or redeeming units of the option are fairly allocated to those members who transact in that option.
The mid price for an investment option is the net market value of the option (net of applicable fees, indirect costs and investment taxes) divided by the total number of units in that option.
It’s essentially an option’s unit price before the buy–sell spreads for that option have been applied to determine the buy price and the sell price.
New unit prices for each investment option are calculated each business day (Monday to Friday excluding public holidays) and are published on our website within two business days.
We have an additional unit price on 30 June each year. This is to ensure we’ve properly valued and reconciled your account at the end of each financial year using the most recent market valuations. This date might be different to the most recent unit price date that is used in FYTD calculations.
Unit prices apply to all of CareSuper’s investment options, except the Direct Investment option.
The main reason why the unit prices for the super and transition to retirement options are different from the pension options is because of their different tax treatment. A super or transition to retirement account pays tax on investment earnings (which impacts its unit price) but a CareSuper pension account doesn’t.
While we have established procedures to reduce the risk of unit pricing errors, they can still occur (e.g. if a valuation from an investment manager is incorrect).
If there is a unit pricing error and you have been materially disadvantaged, we would add the extra units to your account balance to make up any loss.
This option invests in a mix of cash and money-market securities, including at call and term deposits, bank bills, negotiable certificates of deposit, short-dated and floating rate securities issued by Australian and overseas government, banks and companies.
To achieve returns after tax and fees, at least in line with the inflation rate (as measured by CPI) each year over rolling 10-year periods. It aims to outperform the return of the Australian cash market as measured by the Bloomberg AusBond bank Bill index.
The level of market interest rates is the main driver of returns for the Cash investment option. These market interest rates are derived from the official cash rate set by the Reserve Bank of Australia (RBA). Higher interest rates would lead to higher returns, and lower interest rates resulting in lower returns.
Very low. The likelihood of a negative annual return is nil in every 20 years, but in low interest rate environments, market events could lead to a situation in which interest rates go below zero. As at 2021, the Governor of the RBA has stated publicly that this is unlikely to happen in Australia, but it has occurred in some overseas markets.
The RBA cut its official cash rate to a record low of 0.10% in November 2020. Given this low interest rate setting, returns for our Cash option are expected to move lower. While we expect the investment return for the Cash option to be positive, there is the real possibility that you could see a reduction in your super account balance after all fees and costs are deducted.
There is also a very high risk that investing solely in the Cash option now could result in your super savings not being able to keep up with rising prices.
Returns for the pension Cash option are slightly higher as pension members don’t pay tax on investment earnings.
The Cash option is designed to preserve your capital and provide stable returns rather than to grow your super. This option may be suitable for those who are looking to invest their money for one year or less. As an asset class, cash may also continue to serve a purpose in super. Combined with other investments, cash provides liquidity, income, reduced volatility, and diversification to an investment portfolio.
You can log in to your CareSuper account to see how your super’s invested.
CareSuper offers a number of options for you to choose from. Investing in a mix of the five different Asset class options or in one of our Managed options will help to reduce the risk associated with investing in a single asset class. You can learn more about our investment options by reading the Investment Guide or Pension PDS Guide.
You can also discuss your goals with one of our financial advisers to determine the best option to meet your outcomes. If you would like to book an appointment with one of our financial planners visit caresuper.com.au/advice or call us on 1300 360 149.