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First Public Fee-Free Balanced Super Account from ING Direct

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I was looking for super options today and I noticed that ING has a safe plan, as well as a balanced plan that includes no admin or management fees. The returns also seem quite reasonable as well for the balanced plan(7% YTD).

This seems like quite a good option to me. I am not sure what the catch is, to be honest. Maybe they make enough out of the term deposits that form part of the balanced option to justify offering the super itself for free.

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  •  

    For a full list of the fees > http://www.ingdirect.com.au/super_and_retirement/living_supe...

    Fee free for the first options but if you want a bit more control then there is a still relatively small fee. Brilliant setup, might have to move over. Thanks for sharing.

  • +1 vote

    What is this? A seems like a hybrid between a commercial and self-managed super fund.

    The returns also seem quite reasonable as well for the balanced plan(7% YTD).

    Doesn't mean anything. The long term (10 years+) return is what matters.

    • +1 vote

      True but it's a bit difficult to give information on the long term returns when they have been around for less than a year.

    • +4 votes

      10+ year returns also mean nothing if they took place during a bubble. Trust me - I used to rate managed funds for a living, and the guys who earn their living from this government-mandated skimming operation are no better than monkeys.

      If you look up the Sydney Morning herald from just before Easter 2000, you will see an interview with me querying why BT had a bajillion shares of One.Tel in their IMPUTATION FUND… the fund dropped 8% in the following WEEK. The portfolio manager's words wee "Packer's in it. Murdoch's in it. That's all I need to know." I put a SELL on that fund before I even got back to the hotel.

      •  

        government is really a tool in the hands of white collar crooks
        when Abbots bay at nanny states and somehow suggest that business always does things better labour loses its nerve when people do not want tough solutions for the benefit of all people.
        democracy is useless when people are not rational but selfish
        communism and fandamentalism are worse
        fascism is really communism
        in disguise.
        we have fascism for business intersts in oz
        would like the exact link to your comment as needle in a haystack otherwise.
        ty for a good comment then.
        have been fleeced by the financial services industry over many years.

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        pathetic manager response
        unfortunately we have many cowboys in the wild west that is oz still as there is no sheriff in town

    •  

      try an industry fund for better returns and lower fees
      you need to do your own research though as they change year to year.

  • +1 vote

    I signed up a few weeks back and got a $50 voucher on the way for rolling over my Super.

  •  

    Does super come under some sort of govt guarantee? So if ING Direct went bust would you lose all your money?

    •  

      I don't think such a guarantee exists.

      The exception is where Fraud exists. ie Trio Capital.

      •  

        SMSF funds dont have the guarantee for fraud.
        this one should.
        but returns and incompetence are not guaranteed.

    •  

      a super fund is a trust. It doesnt matter terribly if ING goes bust, its more so the companies that they have invested your funds in.

  • +2 votes

    No fee options

    Cash Option
    Cash: 100%

    Balanced Option
    Cash: 50%
    Australian Shares: 30%
    International Shares: 10%
    International Shares (Hedged): 10%


    Careful here - if you are no where near retirement age (say under 50) why would you put your super into all cash or even 50% cash and deny yourself an opportunity for long term growth earnings.

    • +1 vote

      A 'cash' allocation by a portfolio manager is the ultimate in disgraceful ticket-clipping behaviour: these people are paid to put money to work in ways that are supposed to outperform cash.

      That said: with markets at a swing high (or within a poofteenth of a swing high), only a retarded herd animal would be putting money into equities now. Money printing and press releases are not going to save the rest of the West from going the Cyprus/Greece/PIIGS route.

      •  

        yes, but as Keynes said its a beauty contest and the least ugly wins.

        Gold bugs are crying into their pillows at night. Real estate zealots have taken a bath. Cash is becoming a marginal proposition. About the only people who have done alright out of the last year are those with solid income stocks.

      •  

        What do you expect with a fee free supper investment option? These are probably fairly good for people who are near retirement and prefer safety over returns.

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          Ubank has a SMSF bank account setup. That way you can put the money in the bank itself without having to pay someone 1% a year to do it for you.

        •  

          so does ING!
          and all banks
          ING actually goes one better.
          neyond mug's investing
          to other options in the balanced fund.
          fee free is good
          but its returns may not match other managers
          the net returns to you after fees and taxes should be better than indexed funds every year for it to be worthwhile
          most active managers apparently do worse than passive indexes.

      •  

        hard to sift through conflicting investment/tech anal theories to make sense of risk return diversification, long/short term etc.

    • +1 vote

      theres the answer I suppose. The cash portion is large enough that ING makes enough of a benefit from it to not charge for the super.

  •  

    Either 100 or 50% cash is a bad idea seeing as we know that the interest rate at present is 2.something%.

    That guarantees that your money will go backwards.

    • +4 votes

      Have a look at returns on broad asset classes over the last ten years if you had invested in equities when they were overbought and overvalued… parking in cash is sensible in those circs. There are a bunch of people who were long Nasdaq at 5000 who wish they had been in cash.

      Also - 2% is the interbank rate and the rate on call deposits. Any sensible numptie can get 5% on up to $250k through ING or any of twenty other domestic financials; splitting larger amounts of cash across institutions means that you can get insured deposits of almost any magnitude, earning 4.75% and above. With normal estimates of equity risk premium, you would need to expect 7%+ return on equities - at a time when equities have double in less than three years already, and where the economic outlook is nowhere hear as rosy as Wayne Swan keeps claiming (with his 'forecast surplus' for the last four budgets running… all of which evaporated in a could of sputtering self-justifications).

      I wrote a piece back in 2001 that showed quite clearly that investing with the market PE > 15 (based on known, historical earnings, not pie-in-the-sky analyst forecasts) leads to negative returns (relative to cash) over five and ten year horizons. If the trailing PE is over 20, negative nominal returns occur 80% of the time. And if the price-to-peak earnings is over 16, ten-year nominal returns average less than 1.3% (well below inflation).

      I reckon I know something about financial market expectations - I'm one of the guys who were invited by Treasury to help them fix the modelling of expectations in their macroeconometric model (called TRYM) - see Powell, Malakellis, Transom and Marshall (1997) in the Treasury document archive).

      •  

        as the cat asked alice
        oo are u?
        Review of the TRYM Model, June 1997
        COMMENTS ON SOME MODELLING ISSUESì
        by
        Alan A. POWELL2, MichaelMALAKELLIS, Geoffrey J. TRANSOM2 and Peter J. MARSHALL3
        Centre of Policy Studies and Impact Project, Monash University

        an abstract would be good
        though you may have given it already?
        thank you for your good work here.

        love to read that piece
        you wrote

  • +2 votes

    Bear in mind, folks - if you take a 'balanced' option, you are actually betting on the fund selector TWO levels.

    First, you are betting that the managers selected by the 'fund of funds' are the best prospective managers in their asset class; and

    Second, you're betting that the sectoral asset allocation undertaken by the 'fund of funds' is better than a market-cap weighted allocation.

    In my experience, neither of those things is true. (By 'my experience' I mean that I rated managed funds for a living: visited them all - Zurich/Scudder, BT, Colonial, MercyMut and so forth all the way down to boutique convertible bond arbitrage funds).

    'Balanced' allocations are almost always

    • overweight big-caps (index-hugging);
    • overweight domestic (Oz mkt is <5% of global equities, but Oz equities are > 40% of 'balanced' funds); and
    • overweight any asset class that has outperforms (TIME in 2000; FIRE and domestic fixed interest now) due to herd-mentality.

    [Note: TIME is 'technology, internet, media and entertainment'; FIRE is 'finance, insurance and real estate' {and 'real estate' is REITs, not property}].

    •  

      Where should we put our money in at the current market situation?

      • +2 votes

        Call Tommy Waterhouse ?
        ;)

      •  

        If you dont like heartburn, keep it in cash, even though its a break even proposition at best at the moment.

        If you can stomach a bit of risk, there are still some decent secured notes options around. Some are pretty low risk. I dont think Sydney Airport is going to go bust, for example.

        If you can stomach a bit more risk, buy stocks in businesses that people are going to buy even if the sh*t hits the fan. Woolies, for example, is paying 4.6% and although its somewhat ex-growth I reckon Woolies is a safer bet than the banks. People arent going to buy tea bags off the internet anytime soon either.

        A lot of people have lost their shirts on the forex market. Yes, the Aussie dollar is overpriced in PPP terms, but not in commodity terms. A Big Mac in Somalia is always going to cost less than a Big Mac here.

        having said that i will probably move to intl income based stocks, for the most part.

        fwiw. pick your poison.

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        so diogenes says not management funds
        you need to learn sector rotation
        and maybe ETFs so you can do your own investing/trading but I found learning this all too much.

  •  

    Where should we put our money in at the current market situation?
    Cash, then wait for the next big downturn, it's called the Fat Pitch approach.

  •  

    I work for a another financial services company.

    The way ING make money I'd the cash is all used by them to fund mortgages. AFAIK there is no guarantee they will pay a fair/top return on that cash.

  •  

    Investing super into cash now ??? wouldn't the AU dollar eventually go back down to under the US dollar mark ?
    Or have I got it all wrong, in that case what do you mean investing to cash

    •  

      The bank rate you get from a standard savings account.

      What you referred to is FOREX.

  •  

    If you can't find a fat pitch, hold cash It gives you flexibility, the option to move quickly and buy. It is ''The Bat''. You can't hit without it. Cash is a powerful weapon. It focuses the mind on looking for a fat pitch.

  •  

    To answer where to put the money now if not in cash, I would suggest equities giving good dividends. You can get 3 times that of the cash rate.

    But, it all depends where in your life you are up to. Eg are you young and just starting out, then cash is too risky; if you are much older and need money to cover your longevity, quite a lot of cash is sensible as if there are any more nasty surprise GFTs, you don't have time as a youner person does, to recoup over the long term.

    •  

      problem is you may get a dividend but lose your capital
      and then sell only to see telstra shoot up in spite of analyst forecasts.
      and IAG!

  •  

    Guys, ING has a direct option where you can invest directly in the TOP 200 ASX shares without having to pay any management fees, you will only pay the brokerage to buy the shares. Choose this if you have more confidence in yourself than with the Fund manager.

    SMSF Features without the hassle
    No messy paperwork, establishment fees or compliance hassles
    Great rates on cash and term deposits held with ING DIRECT
    Real time share trading with S&P/ASX200 shares and ETFs
    Extensive share market research

    •  

      that's if you know how to time the market, balance micro and macro forecasts, buy and sell at the right time, be rational and not hang on to your losses or profits.
      all too much for me to synthesise
      you need the right quant ability, analytical ability
      otherwise benchmarks may show you up as just a mug punter.

  • +3 votes

    "Possibly" the best return on money a lot of people can get these days is to pay down existing debt.

  • +1 vote

    There is way more debt than cash - so, in theory, all the debt can never be paid back because there isnt enough cash. Bankrupt.

    Printing more money makes the existing money more worthless, and those that can borrow cheap money buy shares in companies (operating in a global world where half is hamstrung) causing the stock to rise without reason - here we go again.

    It all began with the introduction of credit cards in the 70's to continue 50's consumerism.
    70's credit cards was the same as printing money today - made of thin air, and gave us a breather until 2000.

    my 2c

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