Buying Vanguard ETFs through industry super

I'm preparing to do a comparison of the fees from industry super funds for a family member for a DIO (direct investment option) into Vanguard ETFs (primarily VAS and VGS).

If someone has already done the comparisons of:

• How much has to be kept in cash/pre-mixed vs direct investment
• Fee for cash/pre-mixed portion
• Fee for managing ETF bit (what a joke)
• Transaction/brokerage fees

it would obviously save a lot of time (and maybe even be of interest to other members who can't do SMSF)

If there is already a thread out there on this (I've searched but only found mentions within threads and no spreadsheet comparisons), that would be great.

Thanks in advance

 

Not an industry superfund, but I have Vanguard DIOs through Sunsuper.
Nothing kept in cash, I forget what the management/admin fee is but its 'not much' last I looked, no transaction/brokerage fees just a buy/sell spread.

I cant be bothered digging out the specifics but its clearly cheaper and easier than having a SMSF if the purpose is just to hold a handful of Vanguard ETFs (which is all I do).

 

Thanks @MB18 , you're right, it is cheapr than SMSF.

There are lots of super funds that have DIO, and even though they may be not much comparatively, they all eat into the end return. I'll add Sun Super to the list, just looking to compare ones like Hostplus, Australian Super, Legal Super, Caresuper and QSuper. Will add Sunsuper to the list.

Thanks again.

 

I engaged the services of the people at Bell Potter to do this for me via SMSF, so far so good.

 

Sunsuper doesn’t have a DIO option, it has pooled index funds that used to be managed by Vanguard but will be changing now that Vanguard is entering the super market.

Cheapest DIO option right now is HostPlus ChoicePlus with $258 annual fee and no percentage based admin fee aside from the underlying ETF MER.

You have to keep 20% in pooled funds and at most 20% in each direct holding.

Personally, I’m waiting to see what Vanguards offering is like before switching.

Recommended reading
The problem with pooled funds — Passive Investing Australia

 

Thanks @Colin Rice , unfortunately they do not have sufficient funds in Super to make SMSF worthwhile, therefore the invest in ETFs through retail fund research.

 

Yeah, thanks @Hockey Monkey , that's why we're looking at ETFs rather than pooled funds. Hostplus and Caresuper seem to be the lowest fee.

I am intending to look at Vanguard super when it comes out, looks like may be 6 months. Question is why not do it with lowest fee provider now and then migrate to Vanguard when they set up if better option? There's no transfer fee, is there?

 

My super is with SunSuper but once you exceed a certain balance a SMSF becomes cheaper than Sunsuper. This can be lowered even further by having a SMSF with a partner and other trusted family members.

That being said I like the fact that I do absolutely nothing so I may just stay with Sunsuper and not overcomplicate.

 

Thanks for reminding me, that was another reason. We were not able to quantify the difference due to pooling but it wasn't insignificant.

 

Caresuper doesn't look too good due to
- 0.19% Admin fee (capped at $500)
- Only 75% of funds can be invested in ETFs vs 80% for HostPlus (20% per holding)
- No indexed options for the remaining 25%

Switching providers will incur capital gains tax and brokerage as you cannot transfer holdings without selling. Better stick to a pooled fund until you are ready to lock in a super provider permanently.

 

Thanks @Hockey Monkey, guess we'll wait until Vanguard brings theirs out

 

Hi all … my eyes are crossing over after reading all the threads and wanted to see if I could score a shortcut here …. @Hockey Monkey Passive Investing Aus is on my to read list but may not get to it tonight

I have SunSuper … I would like to invest in VAS/VGS 50/50. Does anyone know what I can do within SunSuper to mirror that allocation as closely as possible?

All good if there’s no easy answer, I’ll keep researching ….

TIA

 

In SunSuper a 50/50 VAS/VGS equivalent is achieved by
50% Australian Shares – Index
50% International Shares – Index (unhedged)

 

@Hockey Monkey are you currently with HostPlus ChoicePlus?

I'm also awaiting vanguards offering which was touted to be due in the second half of this year

 

Thank you so much!!!

 

Not currently, Mrs Hockey Monkey and I are both with UniSuper who have fortunately continued to outperform last year.

I’m using the release of Vanguard super as a trigger point to decide whether to switch to a direct investment option as once switched you really need it to be a permanent change.

Selling down ETFs to switch a 2nd time in the future would put you worse off than a pooled fund due to CGT.

We plan to overshoot the transfer balance cap which gets messy with Choice Plus as you have to transfer all ETFs at once when converting to pension phase

Rumor I heard yesterday is Vanguard Super offering release is likely slipping to 2022

 

Checked out their site … looks like Int Shares index unhedged has been the strongest performer for some years ….. interesting ………

 

Yes, equities and in particular US equities have had a great run since the GFC. They are almost too good to be true ie unexpectedly good due to 5 or 6 Mega Corps.

Past performance is not an indicator of future performance...

 

I contacted Vanguard recently about a start date but nothing useful forthcoming. They are probably hitting bureaucratic blockers due to the impact they are going to have on the existing industry, ie the friends of those who will sign off on Vanguard's entry.

As long as they don't price gouge and don't have a pooled fund, there is a very good chance I am going with Vanguard.

To the OP, I am with SunSuper for their low fees. They are a really good industry fund that give me the flexibility to choose index equivalents to VAS, VGAD, VGE, VAP, VGB, which is pretty much all I need. I like the simplicity if this option. Unfortunately, these index options are part of a pooled fund, which is a drag on performance. The drag is probably very small, but compounding over time, not insignificant.

I was with a direct option (non pooled) fund (ING) in the past but they drastically increased their fees (gouged) after I had transferred all my Super into their fund, which cost me a lot of money in the brokerage alone.

If Vanguard doesn't eventuate for some reason I may need to go SMSF based on my balance, the fact I can merge with my wife, and the subsequent fee savings available in a non pooled fund with flexibility. I don't want to spend much time on Super so this is what is stopping me now.

I've tried very hard to learn as little about super as possible but I have an aversion to financial advisors and need to plan so I can get an external trust and super optimally balanced.

TL;DR

• Sunsuper is a simple industry fund with cheap fees, enough flexibility (for 6 sigma) BUT in a pooled fund
• ING is to be avoided but there are good direct options that may suit - DYOR.
• Larger balances may require SMSF to minimise fees BUT SMSF takes more time and thought

 

Thanks @Zenith Chaos , it does look like it will be 2022 now for Vanguard Super. Looks like the existing players know what they will do and are trying to have regulators make it difficult for them. I think my friend will wait as if they go with someone else, they will have to sell, pay CGT and then rebuy the ETFs when they put into Vanguard Super. The Vanguard Super product in the UK may be a good indicator of the competitive offer once they are here:

Vanguard: Helping you reach your investing goals | Vanguard