Chasing better super returns

I had no idea that was Sam Henderson in the RC. I'm currently reading his book on SMSF's.

 

I'm not too worried about the fees, in the grand scheme of things i'll get that back with the better returns

 

Paying that extra 50-100 for fund diversification. Not sure that it's worth it but it could be a valid strategy up to a point, e.g. less than 5 funds.

 

Past performance is not an indicator of future performance. In theory, over time, the index fund should perform better even before fees.

 

That's the fundamental argument about passive versus active. You obviously believe in active but there are strong arguments for passive - eg Buffet bet with hedge funds .

 

I'd like to see more providers enter the Direct Investment Superannuation space:

1. Fee structure limited to brokerage costs and a low fixed yearly admin fee
2. Better standardisation within the industry of investment choices ( ASX300, ETFs / LICs - ING have the best selection )
3. CGT-free transfer of investments between institutions ( I understand that to change provider I would need to sell-down all my assets and then rebuy at the new institution )
4. Usable broker interfaces ( the one provided by ING is terrible )
5. Facilities for monitoring investment performance using my own preferred tools ( hence my interest in Sharesight @David@Sharesight ). Would also be good to see fee impact modelled ( perhaps with an industry average benchmark shown ).

SMSFs are not for me. Too much admin. Too costly. Not interested in property in my superannuation.

Whilst banks have been savaged in the royal commision, I actually think they have the best scale to offer products meeting the above criteria. Legislation changes may be needed to deal with point 3 above. Can anyone clarify?

 

i went down this path and drew the same conclusion. I pulled out though after setting up the bare trusts etc...f^*&%in ASIC fees!

 

A not so recent thread but the title of "chasing" better returns grabbed my eye. Be wary of that as this rather sad outcome could result:

'When will it end': Scott's plea to Bendigo Bank

I'm in two minds about the article. I don't like seeing people in financial distress. It has ramifications beyond just losing money. However, I have the jaundiced view the operative words for a SMSF is Self-Managed. Obtaining advice or a recommendation doesn't shift the responsibility in my view. It's not mandatory to follow them and the dude signing the cheque is the one hanging 'em over the fence.

 

Start looking into the top past performers over the last 10 years or so, won't guarantee future performance but at least you know they have been doing something right.
Then look to see out of those company's have the cheapest fees in insurance, host plus might be better than most in past performance but at your age your paying more in fees over the others, double the insurance amount even in the top 5 performers from best to worst.

Another thing you might consider is seeing if your super company will allow you to be gone with insurance cover all together, this can save you at your age between 3100-7700 per year in fees referencing the top past 5 super performers.
But this will also depend if you need the insurance cover. At 50+ years of age your paying 3-7K+ for $100,000 in cover, and that cover significantly reduces the older you become. This is not advice, do your own research. Good article in August money mag that explains it well.

 

I did some digging around over the weekend and here is what I found just looking at 10 year performance net fees up to June 2018:

Australian Super Balanced: 7.31%

Australian Super High Growth: 7.40%

Equip Super Balanced Growth: 7.46%

Equip Super Growth: 7.61%

Hostplus Balanced: 7.43%

Hostplus Indexed Balanced:

No ten year data BUT looking at a similar product Vanguard Wholesale Growth Diversified post super taxes we get 7.32% For reference the Vanguard High Growth option is 7.68% net fees and taxes. Note that the Vanguard performance figures don’t include other fees associated with having these funds in a SMSF or WRAP account (I imagine that would be the only way to have access to these Vanguard products in your Super).

The asset allocations for the funds above range between 0-30% defensive assets with the balance in growth assets.

I can also post 1,3 and 5 year data as well if anyone is interested. Having said that, in the shorter time periods the other funds above have out performed the Hostplus Indexed option where as in the 10 year they approach similar returns.

Not advice and past performance is not an indicator of future performance.

 

Don't know about chasing better returns but, by heck, the fun and games going on over at the Royal Commission makes for interesting reading. Doesn't surprise me much though that where there is a heap of other people's money lying about someone will try and get a cut of it one way or another.

 

I thought that I read somewhere that the Hostplus Balanced option after fees return was much better than the Hostplus Indexed Balanced return after fees! However, this might be because the Balanced option has invested very little in cash and has instead placed a large proportion of its investments in what it terms 'other defensive investments'.

 

Very small spread in returns of 0.3% confirms my decision to chose the lowest fee super option with access to diversified index funds - the fees could be the difference.