What are some investment options outside of super?

When it comes to investing, you have two options – inside or outside of super. 


Super, being a longer-term investment designed to fund your retirement, comes with a number of advantages such as being lightly-taxed (which can mean, more money to invest in your financial future) but does have some constraints including not being able to access  your super, generally, until you have reached retirement.

While super is a popular option for many, there are also a number of investment options to consider outside of super – you just need to find a mix that fits your needs.

Managed Investments

While you’ve probably heard of managed funds, there are other types of managed investments such as managed accounts and Exchange Traded Funds (ETFs). The main appeal of managed investment, is that they take the hard work out of selecting which assets to buy and sell and when to do it – a professional investment manager can do so for you. Like all other investments, however, there are risks associated with the above. In addition to the risks that apply to investing generally, for managed investments specifically, risks also include the possibility that the investment manager may not perform as expected against their respective benchmarks.

Here are the types of managed investments you could consider:

Managed funds – investment vehicles where the money contributed by a large number of investors is pooled and managed as one overall portfolio by a professional investment manager. Investors purchase units in the fund, which entitles them to an interest in a pool of assets with the unit holders.

Managed accounts – these are similar to managed funds, except that instead of owning an interest in a pool of assets, a portfolio of assets is bought specifically for you (which makes you the beneficial owner of all the assets in your portfolio). This also means they can be more tax efficient.

Exchange Traded Funds – ETFs are listed on the share market, which means they can be bought and sold like shares. They also allow you to invest in a range of asset classes or sectors.

Cash investing

It’s no surprise that many may be tempted to stash their cash in an account – doing so gives you the ability to access your money at short notice. Your money can also usually be accessed with low, or potentially zero fees applying to withdrawals (except in some cases, for example, early access to term deposits). Keep in mind though, in the investment world, lower risk can mean lower returns, and the key downside of cash is that your money won’t generate capital growth (so unless you earn more than the rate of inflation, after tax, and reinvest those returns, inflation can lower the purchasing power of your money).

Investing in shares

As an investment, shares have lower and fewer upfront costs, which is why they’re quite popular among investors. There are no ongoing costs and depending on the share you choose to invest in, shareholders can earn regular income through dividends as well as enjoying the potential for long-term capital growth. Having said that, it’s important to understand that share prices rise and fall and the payment of dividends and the return of capital are not guaranteed.

As mentioned above if you aren’t sure which shares to add to your portfolio, remember you can choose managed funds, managed accounts or ETFs where you pick the type of portfolio that suits your investment goals.

Investing in property

Over time, a well-located property could generate long-term growth and income returns. Another major appeal of owning property is its perceived stability relative to the share market, where values can vary as a consequence of how easy it is to buy and sell shares. A property investment, on the other hand, can give you a tangible asset that delivers a sense of investment security as well as capital growth.

Keep in mind, however, that the upfront costs of property can be significant, with stamp duty, legal fees and optional costs, such as pre-purchase pest and building inspections, potentially adding roughly 5% extra onto the property’s purchase price. And while the tenant too wears some of the property costs, related to direct usage, it’s the landlord who generally pays the majority of costs such as repairs, maintenance and insurance, which is why property is generally regarded as a longer term investment. 

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This article was prepared by BT, a part of Westpac Banking Corporation ABN 33 007 457 141, AFSL and Australian Credit Licence 233714. This information is current as at 12 September 2019.

This article provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such.  It does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness, having regard to these factors before acting on it. This information may contain material provided by third parties derived from sources believed to be accurate at its issue date. While such material is published with necessary permission, no company in the Westpac Group accepts any responsibility for the accuracy or completeness of, or endorses any such material. Except where contrary to law, we intend by this notice to exclude liability for this material. BT cannot give tax advice. Any tax considerations outlined in this article are general statements, based on an interpretation of the current tax law, and do not constitute tax advice. The tax implications of investing in property, shares or superannuation can impact individual situations differently and you should seek specific advice from a registered tax agent or registered tax (financial adviser).

Superannuation is a means of saving for retirement, which is, in part, compulsory. The government has placed restrictions on when you can access your investment held in superannuation. The Government has set caps on the amount of money that you can add to superannuation each year on both a concessional and non-concessional tax basis.  There will be tax consequences if you breach these caps.  For more detail, speak with a financial adviser or visit the ATO website.