While ‘conservative’ may have these connotations it also has some positive ones – reliable, safe, predictable – all attributes you might be seeking in investing your super to help ensure it can last a lifetime. This may be particularly true as you get closer to retirement or once you retire.

At this stage of your investing journey, having certainty that your funds will be there when you need them becomes even more important as you plan how to make sure your super will last throughout your retirement and provide the lifestyle you want. 

That’s why we offer the Conservative investment option as one of the choices you can make to invest your funds, both in the accumulation stage of super and in the retirement phase. 

The Conservative option is designed for members who want to maintain some growth in their funds but with a lower risk of potential capital loss than the Balanced or Growth options. We think you could almost call it the ‘peace of mind’ option.

It has a bias towards defensive assets with a high weighting towards Cash to help minimise short term fluctuations, or risk, but still has some exposure to growth assets for long term growth. The long-term strategic mix is 35% growth assets and 65% defensive assets.

The Conservative option’s return objective is to outperform CPI plus 1.5% per annum and the recommended investment timeframe is three to 10 years.

Its risk objective is low to medium and it is expected to generate one to less than two negative annual returns over any 20 year time period. 

Determining what proportion of your funds, if any, should be invested in the Conservative option comes down to the level of risk you feel comfortable with, recognising that while choosing a ‘safer’ option may give you peace of mind it may also result in lower returns. 

This is particularly true in the current environment of historically low returns on cash and bonds which has impacted the recent returns of the Conservative option. Despite the current circumstances, the performance was still well ahead of the objective of CPI plus 1.5% per annum for the 2021 financial year to date and over the investment objectives’ time horizon. Since 1 July 2020, the returns improved in the seven months to 31 January 2021 when the option returned 5.21% for RetireAccess members (net of investment fees and taxes) for that period.

These returns may change over time if interest rates increase with rising inflation, but it is expected that this will eventually result in more positive returns for cash and possibly negative returns for bonds. 

Long term returns for the Conservative option remain strong.  In fact, SuperRatings (an independent ratings agency) ranks TelstraSuper’s RetireAccess Conservative option as number 2 of 45 when looking at 10 year returns (SuperRatings Fund Crediting Rate Survey for the period ending 31 January 2021).^

TelstraSuper Financial Planning’s advisers can help you assess your risk and assist you in choosing the combination of investment options to help give you the right balance for your needs. This service is provided over the phone at no additional cost as part of your TelstraSuper membership.  Call 1300 033 166. 
Find out more or check the relevant Investment Guide or Product Disclosure Statement.

Conservative option performance  to 30 June 2020*