Australian Super member direct

I've also contributed to the analysis in this space
eg
Quantifying tax drag from US domiciled ETFs that hold non-US assets (eg VEU) - Bogleheads.org
https://forums.whirlpool.net.au/archive/2634114

The key new discovery is that a VTS/VEU and VGS/VGE are about the same (within 1-2 basis points) _before_ tax.

So in pension phase it makes no difference, but during accumulation VTS/VEU is more tax efficient to the tune of 0.5% p.a.

IVV should be just as tax efficient because underlying it is a US fund. Does your AMIT statement show any capital gains?

Australia doesn't allow heartbeat trades so would not change. If the US changes their rules, I'd expect VTS/VEU to be roughly equivalent to VGS. I expect a lot of pushback in the US on he proposed bill with a low chance of passing.

 

Maybe not the best place to post this be seems as good as any.

Sunsuper appoints State Street to manage passive investments | Newsroom

 

LOL. We're not having a competitor to us in super managing our funds!

 

it was actually Vanguard that pulled the pin

Vanguard pulls pin on managing money for super funds

 

I was aware of that. I was merely amused at the rationale provided by Sunsuper.

 

This "ESG integration" again...
I hope they continue to offer vanilla market cap options without any additional custom screening

 

Since SunSuper and QSuper are about to merge - and State Street manage some of the options in the QSuper line-up - I am not surprised that SunSuper are also now using State Street.

 

They may not have a choice in the matter. And it seems to be following a similar attitude with overseas companies.

Australian companies are facing more climate-focused ESG resolutions than ever before, and they are paying quiet dividends

 

Portfolio in super still and will remain compromised of the bogle type portfolio of:
ASX TOP X00
INTERNATIONAL
INTERNATIONAL HEDGED
EMERGING MARKETS
PROPERTY
BONDS

Currently in Sunsuper, waiting for qsuper merger and/or Vanguard. Sunsuper tax drag is why I want to leave pooled fund option, but taking my time. What will be best:

1. Do nothing
2. Qsuper ETF option (covers all bases)
3. VANGUARD unknown offering
4. SMSF noting I could merge with wife

The fundamental question is, will option 2 produce the same results as 4 or 3 using bogle portfolio?

PS
Qsuper ETF fees of 0.16% admin plus $299 in addition to brokerage. For $1M that is around $1900 per account.
Self Invest Fees | QSuper Superannuation Fund

Vanguard unknown but hopefully cheaper than qsuper on one or more aspect.

SMSF for 2 would be cheaper than $3800 but more time consuming.

 

Um I think you intended comprised but nevertheless I get what you mean.

 

HostPlus ChoicePlus is a cheaper option 2 as it doesn’t have a percentage AUM based admin fee.

$78 + $30.64 + $180 = $288.64 per account regardless of balance

however if you will exceed the transfer balance cap an SMSF will provide more flexibility and you won’t be required to sell down ETFs below the cap before starting a pension

 

What would people say are the benefits of going member direct with Aus Super vs their standard High Growth option (which I’m currently on) besides if all I would pick would be a basic diversified mix of index funds? Just wondering if fees, insurances, risk etc benefits or suffers from going member direct.

 

- Removed active manager risk
- Lower fees (for high balances)
- More tax efficient as you avoid withheld capital gains present in pooled funds
- insurance is not impact as you must keep 20% in built in options

The decision should not be taken lightly though as once in you don’t really want to ever sell until pension mode or else will be liable for capital gains tax

 

Are there any tax implications for changing from wholesale managed funds/industry superfunds to a direct investment option? Does it constitute buying and reselling (creating a CGT event) or is it still considered a rollover?

 

You need to be more specific in what you are asking. Most likely yes it is a CGT event. Unit pricing in an industry fund would probably take into account the unrealised CG (via tax effect accounting) so you normally wouldn't see much of a difference in your balance if you sold the underlying investments.

Could be a superannuation rollover if changing funds or the fund has accumulation account investments separated (by a different entity) from pension accounts.

There's also CGT rollovers.

 

No as the capital gains tax is already provisioned for in a pooled fund

The problem with pooled funds — Passive Investing Australia

 

Sunsuper and QSuper to become Australian Retirement Trust

 

Hi guys trying to work out overall fees for member direct but confused about something - is it 0.12% * fund balance + $395 yearly?

I am on high growth at the moment with $90k super balance. From looking at statements, im paying about $132 admin fees per year.

Trying to work out at what balance is best to switch

 

Australian Super has a base admin fee of $117 + 0.04% * fund balance for accumulation accounts

Super with Low Fees | Our Fees & Costs | AustralianSuper

member direct adds $395 annually plus brokerage. I believe the 0.04% only applies to the non direct funds.

The 0.12% fee is only on any cash balance

 

Thanks as always for your fantastic analysis Hockey Monkey.

If possible, can you please explain make about exceeding the cap (1.6m) in an SMSF vs Pooled funds (e.g. Sun super index options) vs the ETF purchasing direct (non smsf) super option?

I expect I'll go over the 1.6M by retirement age; however, wasn't aware of that impacting decisions on which super structure type to setup. Was intending to go ETF direct or SMSF circa 500k+ due to your other analysis (thanks again).