How does lifecycle investing work?
Investors are invested into an AMP MySuper lifecycle investment option according to their date of birth. The investment strategy of each option differs based on the age of the members in each option.
| Decade of Birth
|| AMP MySuper Investment option
| Prior to 1950
|| AMP MySuper Capital Stable
|| AMP MySuper 1950s
|| AMP MySuper 1960s
|| AMP MySuper 1970s
||AMP MySuper 1980s
|| AMP MySuper 1990s
For example, younger investors such as those in the 1990s and 1980s options will have higher exposure to growth assets such as shares as they have a long time before retirement and can afford to take more risk (and need to do so to grow their super balance).
For older investors nearer or in retirement, their lifecycle options – such as the 1950s and Capital Stable options – will hold less growth assets and more defensive assets such as bonds and cash, in order to reduce risk and protect the capital they have built over their working lives.
Each option follows a glide path, which indicates the appropriate allocation to growth assets at every age.
By following the glide path, the mix (or allocation) between growth and defensive assets will gradually and progressively change with age and as investors move towards retirement. This provides peace of mind regarding superannuation allowing investors to feel confident by remaining in one option over their entire working life.