The why and how of direct investment super options

Historically, most large super funds only offered their members a menu of investment options that were designed and controlled by the fund’s trustee in cooperation with professional investment managers.

Wider product offerings were available through wrap/platform products, but these were often only accessible through a financial planner.

Now, as large super funds merge and form mega funds, many are using their combined resources to offer a more extensive menu, including indexed options and direct investment.

Direct investment options (DIO) permit members to choose the specific shares, exchange-traded funds (ETFs), listed investment companies (LICs), and term deposits they would like to invest in. This flexibility mirrors aspects of self-managed super funds (SMSFs), as large super funds look to the SMSF sector for ideas to attract and retain members.

Why choose direct investment?

A DIO may be attractive if you want more personal control over how your super is invested, you want to lower investment management costs, or you’re interested in reducing the tax that applies to your investment returns.