What's your risk profile?

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All investments carry some degree of risk. Understanding how you feel about risk is an important step in choosing an investment strategy that works for you.

Understanding risk and return

Before you consider your attitude to risk, it’s important to consider the relationship between risk and return.

  • Risk can refer to several concepts, including but not limited to the possibility that your investment:
    • fluctuates in value
    • achieves a return that is negative
    • produces returns that are less than expected over a particular timeframe
    • underperforms against an index or benchmark.
  • Return refers to how much income or capital growth an investment has gained or lost during a period. 

Risk in itself isn't necessarily a bad thing.

Higher-risk options generally have the potential for higher growth. The trade-off is that there's a higher risk of a negative return and they’re also likely to experience greater short-term fluctuations in value.

On the other hand, lower-risk options are less likely to see negative returns and major fluctuations in value. Typically, they also have potentially lower returns and growth over the long term.

Learn more about risk and return

Growth versus defensive assets

Our investment options are made up of different combinations of asset classes such as cash, fixed interest, property, alternative investments and shares. These asset classes generally fall into two broad categories—growth and defensive.

As the names suggest, growth assets (such as shares, property and alternative investments) are designed to grow your investment, and defensive assets (such as cash, bonds and fixed interest) are designed to provide more stable or reliable returns.

Higher-risk investment options will therefore contain a higher level of growth assets, and vice versa with defensive assets.

Growth and defensive assets also differ in their risk and return characteristics.

You can use our Investment choice tool to see the different types of asset classes UniSuper’s investment options invest in.

Growth assets
Generally higher risk with higher return potential.

Defensive assets
Generally lower risk with lower potential return.

Simply enter your chosen investment options and you’ll get a breakdown of growth versus defensive assets for your chosen investments.

How comfortable are you with risk?

Everybody has different attitudes towards investment risk. To help you determine your risk profile, consider the following:

  • What does the term ‘risk’ mean for you—danger, uncertainty or opportunity?
  • What is your investment priority? Is capital protection or capital growth more important to you?
  • Would market volatility keep you awake at night?
  • Are you willing to accept short-term losses in the interest of possible future gains?
  • Do you prefer to play it safe? Or are you comfortable with a level of uncertainty?

Get advice

Deciding what kind of investor you are can have lasting impacts on your future, so we do recommend you consider this carefully and seek professional financial advice.

UniSuper Advice can help determine the type of investor you are and give you some recommendations on where you could invest your super.

Find out more about UniSuper Advice, or call on 1800 UADVICE (1800 823 842).