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Investment basics

Did you know that you’re already an investor? It might sound like an unusual question, but our Global Retirement Survey discovered that over 40% of people we asked didn’t realise that their retirement savings are invested*.

*Fidelity Global Retirement Survey 2020.

As an investor, you can change this and choose your own investment funds from the range your Plan offers. Or you can stay in the default option if you prefer to let experts make the investment decisions for you.

What is a fund?

A fund pools money from lots of investors. The fund manager then spreads that money across a variety of investments.

You can choose from a range of funds managed by Fidelity and other leading fund managers. These funds focus on different sectors, regions and types of investments. Whichever funds you choose, you benefit from the investment expertise and management of a professional fund management team.

Learn about investing

Types of investment

The different types of investments are often referred to as ‘asset classes’ – some common examples include company shares (or ‘equities’), bonds, property, commodities and cash. The asset classes that are available for you will depend on the funds selected for your Plan, by the trustees, your employer and their investment adviser.

The performance of different asset classes will naturally vary over time. As each asset class has its own unique characteristics, wider market conditions and world events will affect them differently. That’s why it’s important to consider spreading your savings over a range of funds – It may help you to manage the investment risk of your savings falling in value if one asset class is out of favour. This strategy is referred to as ‘diversification’. It is important to remember that the value of investments can fall as well as rise and you may get back less than you invest.

Watch our short video about asset classes.


Diversification is essentially the principle of ‘not putting all your eggs in one basket’.

If you distribute or ‘diversify’ your savings across several different funds, in line with your individual goals and risk tolerance, you may be in a better position to withstand any potential losses from a single asset class.

Watch the video to learn how diversification can help in times of market volatility.

Risk and return

The relationship between risk and return is one of the most important aspects of investment. For you as an investor, generally speaking, the greater the risk you are prepared to tolerate, the more potential there is for your investments to grow. However, there is no guarantee that you will get higher returns by accepting more risk or that you will get back more than you invest. Taking less risk with your investments is likely to mean you see lower returns and while this may reduce volatility, you may not achieve your saving goals.

The risk-return spectrum

This image shows a spectrum from assets with lower risk and less growth potential, towards assets carrying higher risk, with the potential for higher growth.



You may decide to remain in your Plan’s default option, where risk-return is already considered. Or, you may decide to choose your own investment options, if the rules of your Plan permit it. In this case, your tolerance for risk will help you decide which assets to invest in.

Investing when you are some way off from accessing your savings

You may want to invest in assets with a higher potential for growth but greater investment risk.

Investing when you are close to accessing your savings

As you get closer to accessing your savings, you may want to lower the level of risk in your investments. This may help to preserve the value of your savings as you get closer to accessing them.

Watch this video to see examples of how some people view the relationship between risk and return.

More about the main asset classes

All asset classes carry some risk and it’s important to remember that the value of investments can go down as well as up, so you may get back less than you invest.

It is a good idea to review your investments on a regular basis to make sure they are right for your individual goals.

If you are unsure about whether your investments are suitable for your circumstances, or you need advice on any of the options available to you, we recommend that you speak to an authorised independent financial adviser.


Want to make changes to your investments?

Learn more about how to self-select your own investments.

Want to review your investments?

Login to PlanViewer to see where your money is invested

*About the Fidelity Global Retirement Survey

To better understand financial wellness of people around the world, our comprehensive survey posed financial and behavioural questions to working households in the United Kingdom, Germany, Japan, China, Hong Kong and Canada.

The survey population consisted of respondents with the following qualifying conditions: individuals aged 20-75 years old; working full-time or part-time or have spouse working full-time or part-time; not retired;  expecting to retire someday; with or without retirement savings; the main financial decision maker or equal joint main financial decision maker in the household; a minimum household income of United States: $20,000 annually;  United Kingdom: £10,000 annually; Germany: €20,000 annually; Hong Kong: HK$15,000 monthly; Japan: ¥3,000,000 annually; Canada: CA$10,000 annually.

The research and analysis were completed for the United Kingdom, United States, Canada, Germany, Hong Kong and Japan. Data collection was completed in partnership with Ipsos, a global market and opinion research specialist, who collected and collated data for each region in September 2019.