Super is a long-term investment

Superannuation isn’t cash sitting in the bank. It’s your retirement nest egg, carefully invested to deliver returns but balanced against risk.

At LUCRF Super, we understand you’ll need superannuation from retirement onwards. Since it’s likely to be one of the biggest financial assets you’ll own, it’s important to carefully consider any changes to your investment options.

Using the examples of the graphs below, we can see how investment markets and the economy move in cycles.

In December 2007, also the start of the Global Financial Crisis, an analysis of a six month investment cycle shows it’s unpredictable with lots of ups and downs.

When we zoom out and consider the full picture, in this case from December 2002 until January 2018, you can see that investment returns are likely to increase over time.

We’ve developed an investment strategy that seeks to balance both risk and return to maximise the long-term returns of your super and reduce the ups and downs of investments.

Our strategy works on the principle that certain investments (i.e. shares) generally experience greater unpredictability in the short term when compared to assets like bonds and cash. However, shares are more likely to achieve better returns over the long-term than bonds and cash.

The chart below demonstrates the value in maintaining a steady long-term investment focus.

Our MySuper Balanced (default) option is where most of our members have their super accounts.

Members that kept their super invested in our default option for the last 15 years (despite the Global Financial Crisis in 2008/09) found themselves with a substantially higher account balance than those that switched to the more conservative cash option.

Those same members who, in 2003 invested $50,000 in our MySuper Balanced option found themselves over $89,544 better off by 2018 than the members who invested the same amount in cash. A difference of more than 43%.

It’s a simple illustration of how, when viewed across the long term, the MySuper Balanced option has better returns for members (an average of 9.60%* since 1978*).

If you have any questions or would like to discuss your investments with a LUCRF Super financial adviser, please email or call us on 1300 130 780. Expert advice is available at no extra cost for LUCRF Super members.


*Past performance is not a reliable indicator of future investment performance.