The importance of diversification

September 18 |  3 min read

The COVID-19 health emergency has already taken a terrible toll around the globe, with the impact on the economy significant. Many are out of work, and with falling financial markets, super balances are also affected.

Diversified portfolios

While headlines tend to focus on share markets, it’s important to understand that most members of Vision Super have their super invested in more than just shares. For most, their super is also invested in alternative debt, diversified bonds, infrastructure and property. These other types of assets give you a diversified investment, and perform differently to share markets, which helps Vision Super continue to manage their member’s money effectively through events like the COVID-19 pandemic.

For example, the media often reports on the daily ups and downs of the Australian share market. While some investors who just invest in Australian shares might find this useful, for most of us our super is invested in other types of assets as well. In the 12 months to the end of April this year, the Australian equity market, as measured by the ASX300, returned minus 9.1% including dividends, but for Vision Super members in the Balanced growth option the returns over the same period were significantly not as bad – minus 1.09%#. This shows how diversification in Vision Super’s Balanced growth option helps to protect member’s retirement savings. Vision Super’s longer-term performance remains strong, as shown in the graph, so it’s important to invest for the long term.

How Vision Super compares

Vision Super works hard to deliver long-term returns for their members, and the investment team is focused on developing resilient portfolios and navigating through challenging times like this. While negative returns are disappointing, these ups and downs are part of long-term investing. Performance has also remained competitive with other super funds. Over the long term these differences can make a meaningful difference to your account balance.

Most Vision Super members are in our MySuper option, Balanced growth. We compare the performance of this option to similar MySuper funds and the data is compiled by independent ratings agency, SuperRatings.

As you can see in the graph, for the period to 30 April 2020 performance remains competitive over one, three, five and ten years – sitting well above the average.

Need advice?

The best investment option for you is the one that suits your personal goals, whether they be short or long term. With Vision Super you can receive advice at no cost^ from our financial advisers to help develop a strategy tailored for you. To become a member visit love.visionsuper.com.au or call us on 1300 300 820. It’s never too late or early to get advice and doing so could make a big difference to your retirement savings.

 


#Before making any changes to your super investments, please consider your personal objectives, situation and needs. Also remember that past returns are no guarantee of future performance.
*Source: SuperRatings’ Fund Crediting Rate Survey, April 2020.
^No cost financial advice is limited to single topics relating to your Vision Super accounts.

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