The super industry has developed guidelines to measure investment risk in a consistent way. This is the Standard Risk Measure. It helps you compare different investment options with a similar level of risk. Read the industry guidance paper.
Key points:
- The value of your investments can go up and down, and so can your super balance.
- All investments carry a level of risk. The level of risk depends on the type of investments in that option.
- We have guidelines for how we measure risk. This is called the Standard Risk Measure.
- Each investment option has a Standard Risk Measure. You can find this in the relevant Product Disclosure Statement.
- You can use the Standard Risk Measure to compare Aware Super investment options with other funds.
- The Standard Risk Measures are estimates only and are not guaranteed. Actual outcomes may differ significantly from estimates.
- When you choose an investment option make sure you’re comfortable with the risks and potential losses.
Guidelines for measuring investment risk
The Standard Risk Measure provides an estimate of how many times an option will deliver a negative annual return in a 20-year period. It helps you to compare different investment options with a similar risk level.
The Standard Risk Measure for each of our investment options is based on two things:
- asset class risk and return expectations, and
- an option’s investment mix.
The table below shows the risk measures including a corresponding:
- risk band. This ranges from 1 to 7, where 1 is the lowest risk and 7 is the highest risk, and
- risk label. This ranges from Very low to Very high.
Standard Risk Measure
Risk band |
Risk label |
Estimated number of negative annual returns over any 20-year period |
| 1 | Very low | Less than 0.5 |
| 2 | Low | 0.5 to less than 1 |
| 3 | Low to medium | 1 to less than 2 |
| 4 | Medium | 2 to less than 3 |
| 5 | Medium to high | 3 to less than 4 |
| 6 | High | 4 to less than 6 |
| 7 | Very high | 6 or greater |
What you need to know
The Standard Risk Measure can help you compare investment options. However, it’s not a complete assessment of all forms of investment risk. For instance, it doesn’t take into account:
- how large a loss might be,
- the impact of administration fees and tax (including franking credits), or
- the potential for a positive return to be less than you may require to meet your objectives.
You should make sure you’re comfortable with the risks and potential losses associated with your chosen investment option(s).
What Standard Risk Measures are applied to our investment options?
Find out which Standard Risk Measures are applied to our investment options in our Product Disclosure Statements:
- Investment & Fees Handbook (for Future Saver accounts)
- Retirement Income PDS (for Retirement Transition and Retirement Income accounts)
- Investment Funds (Class A and Class B) PDS
We review the Standard Risk Measure of each of our investment options annually, or more frequently if there is a material change.
Where to next?
Understand investment basics
Super is a long-term investment for your future. Understanding how investments work can help you make better investment choices. This can make you feel confident that you’re on the right track to reach your retirement goals.
Change investment options
You can switch your investment options at any time. There is no charge for switching investment options.
Get help deciding the best investment option for you
At Aware Super, we can help you with questions about how to get the most out of your super. You can also pay for financial advice tailored to your specific needs.