A quarter of young Australians don’t know how their superannuation is being invested

Woman sitting at table looking shocked putting coin in piggy bank, not knowing where her super is invested.

Around 24% of young people (aged 18-24) don’t know how their super fund is investing their retirement savings, according to research by online share trading platform Superhero.

In a survey of more than 4,000 Superhero customers, about half knew they had chosen a high growth or growth investment option, with 17% of the total cohort not sure of where their investments lay.

Superhero co-founder John Winters said it’s no surprise that growth is a priority, especially for Superhero customers who are already engaged in the investment space themselves.

“But it is shocking to think that so many don’t know what their super is being invested in.” 

Just over half of those surveyed also said they didn’t know what they were paying in superannuation fees. 

But the group did report their investment preferences, with ASX shares and ASX ETFs (exchange-traded funds) leading the pack. This was followed by property investments and cryptocurrency, the latter being a more popular choice for younger investors.

Winters says this points to flexibility and future digital potential leading investment trends.

“ETFs are a great way to have multiple bites of the cherry when it comes to investing, as they’re made up of several different assets,” he said. “Crypto is an interesting one too – it’s obviously a newer form of investment and younger Aussies clearly see the potential.”

These insights come hot on the heels of the first release of the Your Future, Your Super Performance Test Results from the Australian Prudential Regulation Authority (APRA). This government initiative requires super funds to report on the performance of MySuper products annually.  

APRA’s inaugural test found 13 of these superannuation products failed to meet industry performance benchmarks.

What is MySuper?

MySuper was introduced in 2014 to provide a simple, cost-effective default superannuation option for employees who didn’t nominate their own super fund when starting a new job. Many super funds offer MySuper alongside other investment options (it may often be comparable to their ‘balanced’ investment portfolio), and can be selected by employers as the company’s default option.

It’s these super options that APRA now compares against benchmarks annually for the Your Future, Your Super Performance Test.

Ethical super funds in Australia

If you’re concerned about how your investment choices impact the planet and society as well as what returns they bring in, you’ll want to investigate ethical super options. 

Funds prioritising ethical concerns generally steer away from investments in fossil fuels and other environmentally damaging practices, as well as industries engaging in things like animal cruelty or tobacco production. Instead, you’ll often find investments focusing on education, healthcare and renewable resources among a mixed portfolio of more neutral options with these kinds of funds.

The Responsible Investment Association of Australia and Market Forces are two useful resources to research how ethical a super of funds’ investments are.