Your super is a long-term investment (you will need it for as long as you live), so it’s important not to panic during times of market instability, as this can often lead to hasty decisions which may not benefit you in the long run.
One of LUCRF Super’s objectives is to balance risk and return in order to maximise long-term returns for our members. We have investment strategies in place to reduce the impact that market extremes may have on your super or pension account.
Some investments are more volatile than others, for example shares generally have bigger ups and downs than other investments. However when looked at over time, they tend to have better long-term returns, despite short-term fluctuations. Investments with a lot of volatility are considered higher risk when looked at over the short-term.
The majority of our members are invested in the Balanced (default) option, which contains a mix of assets that provide a balance between risk and return.
The example below shows the difference between investing in the Balanced and Cash investment options over a 7 year period. This is based on LUCRF Super’s actual returns during this period.
As can be seen above, the Balanced (default) option has outperformed the Cash option during this period. Members invested in the Balanced (default) option between 30 June 2004 and 30 June 2011 would have been better off than those invested in the Cash option, despite the bigger fluctuation of annual returns (as a consequence of the Global Financial Crisis (GFC)).
For example annual returns for the Balanced option ranged between -13.37% to 16.60% (difference of 29.97%), whilst Cash returns ranged between 3.02% and 5.43% (difference of 2.41%).
While this example does not include investment performance for this financial year, it does illustrate that when viewed over the long-term the Balanced option has provided superior returns for members. This can also be seen over the long-term with our Balanced (default) average annual return of 10.02%* since our inception (1978 to 2011).
Whilst super is a long-term investment, we understand that it is important to be aware of what’s happening in investment markets in order to make informed financial decisions. Rest assured that we’ll keep you updated and provide relevant investment market updates.
If you have any questions or would like to discuss your investments with a qualified LUCRF Super financial adviser, please call us on 1300 130 780 or email firstname.lastname@example.org