Your money growing strong – choose the investment option that’s right for you

As a member of CONNECT you have a choice in how your superannuation money is invested. CONNECT offers three investment options so you can tailor a package that best suits your circumstances, because everyone's circumstances are different.

You can choose just the one option, or you can choose to split your super across options. For example, you could choose to have 100% of your super invested in the Balanced Option, or split your super with 50% in the Balanced and the remaining 50% in Growth or Capital Stable, or any other split adding up to 100%.

You can change your investment option by completing the Member Investment Choice Form.

The rate that is credited to your account each year in CONNECT will depend on the crediting rate declared for your selected investment option. For the year ended 30 June 2008 the crediting rates declared by the Board were:

Balanced Option	-5.79%
Growth Option	-10.96%
Capital Stable Option	-0.26%

Things to think about before you make your decision:

Saving for super or investing for super?

Many people tend to think about the saving side more than the investing side. But the way your money is invested can be even more crucial than the saving side. That's why investment choice is an important decision for you.

Time is the key

The size of your return, even if it's only 1% more than you could get elsewhere, really can make a big difference over the long term. In the short term you may only see a few dollars difference and not have much concern. But over the long term, that 1% may mean thousands of dollars to you in a super payout.

How does that work?

It works because as you earn interest on your money, the interest is added back to your original money and reinvested. Over time, the compound effect can be dramatic.

The graph below demonstrates how much difference just 1% can make when $2000 is invested each year for 30 years at either 6%, 7% or 8%.

With a 6% investment return your money would have grown to $162, 860. With a 7% return you would have almost an extra $33,000. With an 8% investment return your money would have grown by another $73,000.

By having investment choice you have the opportunity to try and maximise the investment return you get at a time that's right for you, given things like your age, your lifestyle goals, and the level of risk that suits you.

As a general rule of thumb, someone at the early stages of their working life would be more likely to take a longer term view with their investments. Therefore they would invest in more growth-oriented strategies that invest in a higher proportion of shares and property.

This is because they have their entire working life to ride out any ups and downs.

Your choices in CONNECT

GROWTH
An investment for the long term, the Growth option will generally see higher returns, but it also has the greatest risk of returning a negative rate.

Level of Risk
High. Estimate the likelihood of a negative return to be approximately one in every three to five years.

Strategy
The strategy focuses on Australian and global shares, because these asset classes historically produce the highest returns over the long term.
Note: Past performance is not an indication of future performance.

Objectives

1. Maximise long-term returns.
2. Achieve a return after tax and fees of at least 9.0% per annum over rolling seven year periods.
3. Positive returns after tax in at least seven out of 10 years.

BALANCED
Best for medium to long-term investment, the Balanced option reflects its name – treading the middle ground of risk and return.

Level of Risk
Moderate to high. Estimate the likelihood of a negative return to be approximately one in every five to six years.

Strategy
This strategy seeks to moderate the variability of returns from shares by investing in a balance of Australian and overseas shares (i.e. growth assets) with other lower risk investments.

Objectives

1. Maximise long-term returns.
2. Achieve a return after tax and fees of at least 8.0% per annum over rolling seven year periods.
3. Positive returns after tax in at least eight out of 10 years.

CAPITAL STABLE
Best for ensuring security of capital, particularly in the short to medium term. This option will generally see lower returns, with little fluctuation from year to year and very low risk of returning a negative rate.

Level of Risk
Low. Estimate the likelihood of a negative return to be less than approximately one in every 10 years.

Strategy
The strategy is to invest mostly in short duration (cash) and fixed income assets, while maintaining some exposure to Australian and global shares.

Objectives

1. Ensure security of capital.
2. Achieve a return after tax and fees of at least 5.5% per annum over rolling three year periods.
3. Positive returns after tax in at least nine out of 10 years.

Making the right choice

The investment choice you make will affect the long-term performance of your superannuation. To help you make your decision the Trustee provides you with information so your investment decision can be made with good background knowledge.

This website provides general information only. If you require specific information based on your own personal situation you should also consider consulting a professional financial adviser.

CONNECT can help with this. We offer our members qualified financial planning advice through Industry Fund Financial Planning (IFFP).

Socially responsible investing – what is your opinion?

CONNECT is constantly looking for opportunities that will maximise retirement benefits for Members. To this end CONNECT is considering the possible incorporation of Socially Responsible Investing (SRI) into the CONNECT investment policy.

SRI is defined by the Trustee as the use of certain non-economic factors such as, ethical concerns, social justice issues and environmental sustainability, combined with financial objectives to determine criteria for investment processes.

The Trustee is often presented with investment products that are marketed as "socially responsible investment products". The Trustee's approach at this time is that because there is insufficient evidence to determine a valid socially responsible difference in these investments and the economic consequences of these investments it will continue to monitor the situation.

The Trustee recognises that Members may well be interested in this issue and would like an indication as to your interest in SRI in relation to your superannuation fund.

Please email admin@connect-super.com.au with your comments on this issue.