AustralianSuper High Growth: Maximizing Long-Term Returns

The AustralianSuper High Growth option targets maximum capital appreciation through an 80/20 split of growth to defensive assets. Aimed at investors with a higher risk tolerance and a long investment horizon, this option leverages equities and other high-return assets to drive growth. In this article, we’ll explore its core features: asset allocation, historical performance, fee structure, volatility metrics, and who should consider this fund.

High Growth allocates approximately 80% of its portfolio to growth assets, including domestic and international equities, infrastructure, listed property, and alternative investments. The remaining 20% is held in defensive assets, primarily fixed income and cash, to provide some buffer during severe market downturns. This positioning seeks to maximize upside in bull markets while offering minimal downside protection relative to more conservative options.

Over the last 10 years, the High Growth option has delivered an average annual return of 8.2%, outperforming the Balanced option by over 1% per year. During strong equity markets, such as 2016–2019, returns topped 15% annually. However, in bear markets—Early 2020’s COVID-19 crash saw a drawdown of around 25%—the higher equity weight magnified losses. Investors should review performance across multiple cycles to understand both the upside potential and downside risk.

The net investment fee for the High Growth option is approximately 0.95% p.a., inclusive of administration and investment management fees. While slightly higher than the Balanced option’s fee, this cost reflects the active management and alternative asset exposure required to achieve greater returns. Investors should weigh the incremental fee against the historical performance differential to assess value. Lower-cost passive alternatives exist, but may not deliver the same targeted growth exposure.

With an 80% allocation to growth assets, High Growth carries elevated volatility. Standard deviation metrics sit around 11–13% per annum, with a negative-year probability of roughly 45%. This implies nearly half the years could yield negative returns. High Growth is suited for investors who can endure substantial fluctuations in pursuit of higher long-term gains. Diversification across geographies and asset classes slightly mitigates this risk.

High Growth is tailored for younger investors (typically under 45) or those with a long time horizon before retirement, willing to accept volatility for the potential of superior returns. It’s not recommended for retirees or those nearing retirement, as large drawdowns could impact income needs and capital preservation. If you’re comfortable with short-term swings and have at least a decade until you retire, this option could be an effective cornerstone for growth-oriented super.

Members of AustralianSuper can select High Growth via their online account under ‘Investment options’. Confirm your selection before the next market close to apply the change at the prevailing unit price. For those managing SMSFs or platforms outside AustralianSuper, replicate the 80/20 split using index ETFs for equities and bond ETFs or cash for the defensive sleeve.

AustralianSuper High Growth offers a compelling choice for investors seeking to maximize capital appreciation over the long term, accepting higher volatility and potential drawdowns. Its robust historical performance, coupled with diversified growth exposures, positions it as a key option for growth-focused super members. Always align your choice with your risk tolerance and time horizon, and consider professional advice for personalized guidance.