I am currently investing in the balanced investment option and of late I have lost money due to the current economic downturn. If I transfer my money to another investment option – or to another fund – will I crystallise any losses that have occurred in the past 18 months? - Anonymous
The issue of "crystallising losses", or an actual loss rather than a loss on paper, surfaces when you change the way your money is invested. Simply changing superannuation funds generally will not create a situation where any investment losses are crystallised. Changing funds but retaining your investment strategy will ensure that you are just moving funds and not altering your investments.
If, for instance, you roll over your super from one fund to another and change your investment choice from a high-growth portfolio to a cash investment you might be crystallising any recent losses. If the market bounces back, you will have sold your high-growth investments at a low price and may find yourself paying the increased price for these investments in the future.
If you roll over money from another fund to Media Super, keeping similar investment options, you are selling your investments at the old fund and buying investments at Media Super at the current unit price, which reflects the recent falls in markets - you are therefore in a position to grow your balance should a recovery in markets occur. Always seek financial advice before making an investment decision and always ask your fund about exit fees.
For help with rolling over your super, phone your local Relationship Manager at www.mediasuper.com.au/contactus or our call centre on 1800 640 886.