Low Cost Superannuation - Non SMSF

Currently looking for a cheaper super fund - my current (BT) charges 0.55% pa and is getting outperformed by Hostplus index balanced which charges 0.05% pa.

Hostplus index balanced:
Australian equities - target 32%
International developed markets - target 43%
FI: target 15%
Cash: target 10%

This is a bit defensive for my age (mid 30’s) they offer index tracking Australian and International choices which are very low cost which I’d also invest in.

I’ve looked at a couple superannuation comparison sites and they seem to recommend generic balanced options with relatively high fees.

Are any cost conscious Ozbargainers happy with their fund who wouldn’t mind sharing? I know there are cheaper ways of constructing this with ETFs but not keen on doing the SMSF admin.

Thanks in advance

Edit: bit of info from the host plus site at this link on this fund:
https://hostplus.com.au/-/media/Files/Hostplus/Documents/MM1...

Comments

  • +3 votes

    hostplus indexed balanced has always been the go to superfund for a no fuss option,

    it'd be hard to beat 11% return for a set & forget, though past performance =/= future indicator.

  •  

    Why don’t you go for one of the higher growth industry funds like the one you linked to

  •  

    hostplus - for as long as they got the lowest funds they are the best

    Unless you have a SMSF you have no say on what your fund does with your money the only option you have is to pick the ones with the lowest fees

    •  

      I didn’t neg it’s a good point that low fees are good. Not all passively managed funds are the same though - they can be constructed to follow rules not necessarily just a benchmark index.

  • +1 vote

    Thanks all - seems like a good deal I was completely unaware until I started reading barefoot, thought there might be some other gems out there but hostplus it will be.

    Going with this
    60% index balanced
    20% IFM Australian Equity
    10% international shares indexed unhedged
    10% international shares indexed hedged

    That gets the defensive component down to 15%.

    Disclaimer - this shouldn’t be used as advice by anyone just sharing what approach I am taking.

  •  

    Hey, so anyone can join hostplus? Even if working in finance for example?
    What about industry superfund, always see their ads on tv, looks good.

  • +2 votes

    to compare the chant west site is great. I think they charge for comparisons but go here: https://www.telstrasuper.com.au/information-hub/tools/compar... and click the "Super Apple Check" icon and just put in the two funds you want to compare (just leave Telstra there and ignore it) enjoy. P.s. I like the look of Australian Super and will likely move to them soon.

    Ohhh you can put fake info into the site as all the info is provided on site. you can use a real email if you want the comparison sent to you but if you any fake one will do

    •  

      I made the comment below about CareSuper but I did some research and I concur Australia Super does look the goods. Care Supee seem to not be performing as well the last few years compared to Australian Super.

  • +2 votes

    I did read the barefoot sometime ago and I also remember him recommending HostPlus. By that time, I checked their fees against Australian Super which is the one I have and I found out Australian Super was cheaper. I don't know how they compare now though.

  • +1 vote

    Have you looked at unisuper? Fees are quite low there…

  • +1 vote

    How about RESt super? I think their fee is quite low while performance is good.

  •  

    I bet it all on a house to place, its still running. Investing is hard!

  • +1 vote

    I have been in HostPlus balanced fund for around 14 years. Highly recommend them.

  • +1 vote

    With ANZ smart super and I Think their fee also low

  • +1 vote

    Been with CareSuper for 10+ years. The fees are a bit high but returns are always good. Standard Balanced option.

  • +1 vote

    Only go with an Industry Super Fund.
    https://www.australiansuper.com/ is a good one.

    •  

      We're shopping around and am interested in why you say an industry super fund the only way to go?

      • +1 vote

        I felt this way even before the latest revelations in the inquiry into banks and financial services.
        I am in no way an expert, but I did my research a while back and I believe that Industry funds have low fees no commissions and I trust them. I have no trust in the non-industry funds.
        Always remember that fees are a % of the funds under management and not a % of the income on those funds.
        Eg. $100,000 might make 3% = $3,000 but if the fees are 1.5% you lose 50% of your earnings. ($1,500 is 1.5% of $100,000)

      •  

        Because industry funds continuously make more money for their members and charge less fee for it. Check out the link below which mentions how the big retails funds are failing their members.

        I recently got my super statement and it is shocking to see that since joining in 2013 a big retail (BT) fund has only made me 4.06%.

        Ten year return is 6.25% as compared to top industry funds which average around 10%.

        I too am looking to switch as soon as possible. looking to strike a perfect balance of low fee and higher returns.

        http://www.abc.net.au/news/2018-07-19/industry-growth-supera...

  •  

    I am with Sun Super. I constructed an aggressive asset allocation from the low cost single asset funds they offer.

    65% international unhedged (index)
    8% Australian shares index
    12% diversified property (active)
    15% diversified bonds (active)

    I believe active management adds value in property and bonds but could have chosen index options there too. All Sun Super index funds have very low fees.

  • +1 vote

    I looked into HostPlus because of their index balanced, and ended up going 20% index balanced and 80% in ChoicePlus (the HostPlus option to invest directly in the shares/indexes I want). I used ChoicePlus to get indices of AUS/Overseas markets so that I am not too defensive.

    I feel this is an 'SMSF lite' option.

  •  

    What about life insurance? I'm now 50, have had a Perpetual super account with life and TPD insurance, which is due to increase this year. There is also a multiplier applied to the premium due to the medical I did for insurance, which is no good. Can't remember what they call this.

    I would like to change to an industry fund but i presume that would mean another medical and presumably they would apply the current additional percentage as well anyway when I declare it? Out for it friend on the level of cover?

    And which industry fund would be best from an insurance point of view?

    •  

      If you're happy with the default insurance then you can stick with holding insurance in super. All default policies that come standard with super are auto acceptance meaning no medical needed, they just take you on.

      If you want to up the level of cover from default it's probably better to hold the policy outside of super as that's when you start to need things like medicals to underwrite the policy. If you hold that kind of policy in a super fund, you'll need to go through the same process again if you switch super funds.

      Therefore if you need more than the default level of cover, take it out as a personal policy in your name held out of super then you can switch super funds at will and still keep your insurance policy.

      •  

        Thanks for the reply, that makes sense. Wish I'd done it years ago, before health concerns crept up on me :( now feel somewhat trapped.

  •  

    A question is where exactly does your money go when you invest in host plus balanced index fund?

    •  

      you need to invest on it to see whats the composition of the fund (list of shares/stocks)
      even that, some managers might choose not to disclose FULL. ie just top 5.
      why?

      because they are afraid people will just copy their fund/portfolio composition. its their product. they want to protect it. see it that way

      •  

        For this specific fund, it would be in the public interest (given it is so popular) to know where your dollar goes for the sake of transparency.
        Not necessarily what exactly it is invested in per se but who is managing the money and where your money is invested. It is extremely difficult to find out this information specifically for this fund.

        •  

          doesnt matter popular or not as i said its about trademark. same like apple iphone, they wont tell public how they built the phone.

          every funds will have some pds, disclosure document etc. it will tell you in what sectors/markets/classes they will invest, who manage, the time range they recommending (short term or long), etc etc

          ask your provider to give you the pds. if they dont have, its against the law.

        •  

          @dragonindespair:
          In this case, the question is, how is your dollar used to make you money, and if you look into this option, you'll find it is not possible to find out. For a typical fund, you'll see your money is invested in Aust shares, international shares etc. In this particualr option, you actually dont know.

        •  

          @mrtin: i never see their pds so i cant tell you but like i said, contact host plus and ask for the fund pds? actually with most provider you can get it online on their platform when selecting the fund before you invest into it. you will find all the info in there.

    •  

      the most detail I could get out of them is at the bottom of this thread - can’t really tell much except according to their PDS the Australian index appears to be smart beta, the international exposure is 50% hedged.

      If you need additional control their choice plus product is probably a good option you could use to invest in ETFs

  •  

    Hey Op

    I am in a similar situation as you and looking to exit out of Bt.

    Did BT charge you any exit fees? I checked on the website it says there is no fee but just checking if you had to pay any fee ?

    •  

      depends on product within bt. need to look at PDS or just call them.

    •  

      Hey sorry for late reply got my exit statement yesterday. No exit fee. Be careful if you have death or tpd cover as part of BT and switching to another insurer - your new insurer might not insure you for pre existing conditions as it will be a brand new insurance policy for them.

      •  

        np. thanks for replying.

        i do have a tpd and death cover and no pre-existing conditions so should be alright to switch.

  • +1 vote

    Hostplus index balanced:
    Australian equities - target 32%
    International developed markets - target 43%
    FI: target 15%
    Cash: target 10%

    This is a bit defensive for my age (mid 30’s) they offer index tracking Australian and International choices which are very low cost which I’d also invest in.

    Why are you going partly defensive if in your 30s? You're just missing out on growth opportunity. Should be targeting 100% high growth IMO when in 30's. As you go into you late 40's and 50's and you want to protect a bit more of your asset, then start moving towards defensive.

    High growth has higher risk, but in your 30s you have 30 more years to ride the waves of ups and downs, and history shows you will still come out better than parking investments in defensive stuff like cash so early.

    •  

      What should the profile change to in your early 50s? And should it be a big change, or would it be sufficient to just change the contributions going forward into defensive assets and effectively freeze the growth assets at that point?

      •  

        If you're in your 50's you would be well served speaking to a financial adviser or your super fund directly for this sort of advice.

    •  

      Good point actually realised that - didn’t think there would be any more replies here. Dropped the defensive part to 8% by allocating more to the other options that balanced index invests in, can use that to buy up stock in the unlikely event of a big crash,

      In case anyone still reading this - I got the below response from them when I was asking about it’s composition.

      Disclaimer - this is what’s in there / cost as of about a week ago, make your own queries and do your own research this shouldn’t be used as advice by anyone

      The Indexed Balanced Investment Option has been restructured and now has exposure to the below mentioned investment products.
      · IFM – International Equites Unhedged (20%);
      · IFM – International Equites Hedged (20%);
      · IFM – Australian Equities (35%);
      · iShares Wholesale Australian Bond Index Fund (5%);
      · iShares Global Bond Index Fund (10%);
      · Citi Group Cash (10%).
      The Indexed Balanced option has been specifically designed to be only exposed to asset classes which can be accessed very cheaply – such as Australian and International shares, fixed interest and cash.
      As at the 30th of June 2017 the Total Investment Cost for the Indexed Balanced Investment Option was 0.06% (0.02% investment fee and 0.04% Indirect Cost Ratio).

      •  

        Is the international share component really invested in international companies?

        Also, is it really possible, for them to charge 0.06% (currently disclosed as 0.06% previously they disclosed only 0.02% until they were forced to change disclosure of fees and for some of those components 0% yes 0%)? On $1 billion, thst is $600,000. That may pay for 1 portfolio fund manager, and maybe an assistant.

        •  

          You mean as opposed to replicating exposure with derivatives? I don’t think that can be done on what they’re charging in fees.

          Best to shop around but 0.06% is definitely on the lower end. These funds need to pay administrators / custody / legal / ops / finance / compliance / distribution etc not just portfolio management, pm salary isn’t in that ball park.

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