newbie here. My understanding says index fund and superannuation products are both funds that invest in stocks, commodities, bonds etc etc For Index funds, an investor gets units for regular investment and distributions based on how its setup. To exit, one can sell their units and get out. Superannuation takes one’s employer contribution and invests too providing a return. So, if the contribution is already invested, how does a super fund return principal and returns at maturity?

  • They sell the units, obviously. Commented Aug 21, 2020 at 9:23
  • funds don't "mature" so I'm not sure what you mean by your last sentence.
    – D Stanley
    Commented Aug 21, 2020 at 13:18
  • Guess I used a wrong technical term, by maturity I meant when someone turns 70 and govt. permits them access to super.
    – aJ-47
    Commented Aug 23, 2020 at 5:50

1 Answer 1


A Superannuation fund is simply an investment vehicle. It can contain ETFs or Index funds inside it. You can buy units in a Retail or Industry Superannuation Fund and contribute to it, either through your employer or personally, and when these contributions are made more units in the fund are purchased on your behalf.

In most Superannuation Funds you will have the choice to change the investment strategy and give some direction into what the fund invests in. However, if you want full control you can open and transfer all your superannuation funds into a SMSF (Self-managed Superannuation Fund), in which you can invest in direct shares, ETFs, Index Funds, other Managed Fund, and even direct property.

When you retire (from age 60 and above) you can either withdraw all your Superannuation funds as a Lump Sum or you can convert up to $1.6M into a Tax-Free Pension Fund from which you can draw a Tax-Free income from.

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