Firstly, Australian Super have updated their fees for the 12 months to June 2014:
| Investment fee | |
| Indexed Diversified | 0.21% |
| Australian Shares | 0.30% |
| Australian Fixed Interest | 0.18% |
| International Fixed Interest | 0.24% |
| Cash | 0.06% |
The most relevant change for our needs is for their Index Diversified (which now has their baseline asset allocation with 70% in growth assets) from 0.11% p.a. to 0.21% p.a. in fees. International Fixed Interest also changed from 0.13% to 0.24% and there were other smaller changes above.
This fee increase is disappointing. Australian Super is the largest fund in Australia and for Index products and standard asset classes should be able to leverage substantial economies of scale.
On the other end of the spectrum, Hostplus are funding their Operational Risk Financial Requirement via the 'Administration Reserve' rather than additional fees from 30 June 2014. They've also largely maintained their low investment fees with only small changes below. This gives them an industry leading low-cost and index offering for most asset classes (their cheapest separate international share fund charges 0.47% p.a. but they do include an international component in their Indexed Balanced fund which should suffice for most).
| Investment fee | ||
| Indexed Balanced | ||
| Cash | 0.02% | |
| Macquarie Investment Management – Australian Fixed Interest* | 0.00% | |
| BlackRock Asset Management – International Fixed Interest Diversified Fixed Interest | 0.25% | |
| Industry Super Property Trust – Property | ||
| Industry Funds Management – Australian Shares |
Note * the Macquarie Investment Management – Australian Fixed Interest option is actually Macquarie agreeing to "Guarantee the return of the UBS Composite Bond Index (All Maturities)", not a direct investment in Fixed Interest.
EDIT October 2014: Hostplus have now updated their most recent financial-year fees in their member guide. I've updated above. Sadly some of the fees are higher but the Indexed Balanced is even lower!
EDIT October 2014: Hostplus have now updated their most recent financial-year fees in their member guide. I've updated above. Sadly some of the fees are higher but the Indexed Balanced is even lower!
In the past 12 month there has been an explosion of providers offering 'SMSF-Lite' direct investment options into ETFs and Term Deposits. If you're using another provider it would be great to hear about it. From perusing the different providers, most I've found don't offer better value than was already offered (with the early providers Australian Super and ING Direct) so probably appeal more to members who want to stick with their existing fund than people looking to switch.
The best I've found of the new breed of these direct investment options is again HostPlus with their ChoicePlus offering. Their ETF List can be found on their website at the end of this article. They offer a better range of Australian Share ETFs than ING Direct but not as wide a range of International Share ETFs (the latter being comparable to Australian Super with just iShares providing International Share ETFs).
Finally, before making any changes remember to consider your insurance needs. For low balances the cost differences in Life and TPD insurance can be larger than the differences in investment fees, so make sure you'll be able to get the coverage you want (get it approved if needed before closing your old super) at a reasonable price.
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