Superannuation Investment Choice

Discussion in 'Superannuation, SMSF & Personal Insurance' started by bfhoon, 3rd Aug, 2016.

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  1. Zenith Chaos

    Zenith Chaos Well-Known Member

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    You shouldn't add the fees. You require a weighted average over the allocation.

    That is 80% Australian x 0.31% plus 20% International x 0.50% = 0.348%.
     
  2. pippen

    pippen Well-Known Member

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    Yeah i read the term and conditions and pds and clarified that! Cheers for the heads up!
     
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  3. Zenith Chaos

    Zenith Chaos Well-Known Member

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    Thanks @The Falcon.

    That seems pretty good, much better than what I was getting charged before. I believe that their Australian shares option is a standard mix of ASX300.

    The fees in my super would be approximately
    - 45% Australian LICs and ETFs @ < 0.2% + 0.13% brokerage
    - 35% International ETFs @ < 0.2% + 0.13% brokerage
    - 10% Term deposit @ 0%
    - 9% Australian shares @ 0.06% buy/sell spread - performance middling.
    - 1% cash hub @ 0% but earning buckleys
    - $300 per year fee @ negligible %.

    This must be less than 0.2% fees over the long term with a buy and hold approach and I get to choose the shares I want, which may be a good or bad thing - from my perspective good. But 1% of the money remains stagnant earning the princely return of 1.05%.

    I should do a calculation to compare how much I lose by having the 1% earning 1.05% but I doubt I would change super now without a very compelling reason.

    I'm actually concerned about changes by the government that could see preservation age increased. I was even advised not to bother about contributions and just invest now.

    Anyway, I guess my question was why those with so much expertise want a DIY option when they could do better themselves. I think I've answered the question by rereading and realising the only possible answer could be because you don't have the time - ie you've got better things to do. The overall returns after fees are probably comparable so why worry...
     
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  4. The Falcon

    The Falcon Well-Known Member

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    For me, its a question of priorities. I'm 38, and long run super is only going to be a fraction of my net wealth. I'm top tax bracket PAYG, so salary sacrifice a few bucks to bring up contributions up to the 30k concessional cap limit and just let it roll.

    Australiansuper's strategies perform as well as a good LIC at similar cost. I recently shut down SMSF due to being one less thing to worry about. I've only got so much time and attention, so need to focus it where it will really move the needle.....that is in 2 unlisted companies that I am involved with. Listed stuff for me is much more of a long game, and long run (10 years+) where most of my wealth will be, but for now, its all about those 2 businesses.
     
  5. Peter P

    Peter P Well-Known Member

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    Great post

    I'm with Australian Super and here are some fees:
    - High Growth 0.73%
    - Indexed diversified 0.12%

    (Their indexed diversified option invests in 100% VAS, which tracks the S&P/ASX 300, it's top10 holdings is worth 46.8% of all holdings)

    I'm 28 now, and have about 35,000 in my super. The difference between high growth and indexed diversified is $213.50pa in fees. This equates $35,000 when I'm 65 (say 7% annual growth). I've chosen the high growth option, but I'm thinking the indexed diversified now... what do people think?
     
  6. Chris Au

    Chris Au Well-Known Member

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    I found the links here interesting food for thought.
     
  7. Hodor

    Hodor Well-Known Member

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    Have you looked at using Australian super and the DIY mixes. Can mirror the high growth in terms of asset allocation at a much lower MER from memory (I don't use Australian super).
     
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  8. Peter P

    Peter P Well-Known Member

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    Newcomer to super/shares here

    I'm keen to make the move from "high growth" to DIY Aus/Int mix, but to which proportion/allocation, I'm a bit confused.

    1) How does franking credits in aus shares play a role in your super?

    2) I read from another thread that having a higher allocation in Int shares in your super, you can build a ASX dividend focus outside super which would make it more tax effective.
    Here are some allocation examples and their fees:
    - Aus80% Int20% = 0.348% fees
    - Aus50% Int50% = 0.365% fees
    - Aus20% Int80% = 0.462% fees
    (high growth = 0.73% fees!)
    Looking at the graphs, International shares have negative growth, should i be learning towards higher int allocation?

    3) "Making extra contributions on a downward spiral"
    Is this done through salary sacrifice or with after-tax dollars?
     
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  9. jprops

    jprops Well-Known Member

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    I note he said "future investments" - anything to be aware of if you were to change existing account balance?
     
  10. Peter P

    Peter P Well-Known Member

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    Does this mean you invested 100% in Australian Shares from the DIY mix?
     
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  11. sharon

    sharon Well-Known Member

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    I don't know anything about super.
    I have noticed however that a lot of reports that rank super funds - tend to put QSuper towards the top.
    I have been told you can buy LICs EFTs etc in QSuper (I don't know the details though).

    I believe from July 1st this year anyone can now use QSuper.

    Again - not a recommendation or anything I seriously know nothing about super. I just noticed that this one seems to do well in most reports.
     
  12. Alex Straker

    Alex Straker Financial Life Coach Business Member

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    If I could like this 1,000 times I would. Strong psychology, habits and skills is always most important factor.
     
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  13. Nodrog

    Nodrog Well-Known Member

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    Thank you.

    Although not too much use of skill in the 87 crash and could have done better during the GFC. But even if all investors do is avoid selling quality assets and keep buying more during these gloomy times they will be way ahead of most. So I think psychology is the most important area as it's the hardest to deal with and most difficult to improve compared to habits and skill.

    Might have to brush up on and improve my extremely rusty TA skills for the next big one:). Fantastic opportunities come along roughly once a decade so anything one can do to maximise these is worthwhile.

    The worst of the GFC wasn't really that bad for ASX. Investors need to be prepared for potentially much worse at some stage in their lifetime. A knowledge of market history and how to protect against and deal with worst case scenarios is well worth learning.

    This is an area I've been heavily reading about recently and ensuring our portfolio will still meet our "retirement" needs even in a Great Depression type scenario.
     
  14. Alex Straker

    Alex Straker Financial Life Coach Business Member

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    Yes indeed on that
     
    Last edited by a moderator: 21st Jul, 2017
  15. Bunlee

    Bunlee Well-Known Member

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    Hey all

    Just had a quick look at my spouse's super performance for the y/e 30/6/17 - 1st State Super -

    Australian Shares 12.95%
    Int'l Shares 13.78%
    High Growth 14.40%

    We don't have the crown jewels in there but not an untidy result for the year.

    Best to all
     
  16. Scott No Mates

    Scott No Mates Well-Known Member

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    Your super fund balance is based on asset values whether the fund manager holds the shares or sells (& crystallises the perceived losses/gains).

    ASX still lost % but was better than many countries stock exchanges. Unfortunately, most superfunds have more exposure to international stocks than Aust stocks.
     
  17. Nodrog

    Nodrog Well-Known Member

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    Since CIPR there's obviously been more and more talk about the future of retirement income products. I have my suspicions that one day the Government might make it compulsory for Super funds and SMSFs to purchase some crap annuity product.

    For younger superannuants , with the constant tinkering by Government it must be bloody hard to have any faith in the future of Super. In decades to come access is likely to be later in life (perhaps think 70) and you may be forced into some annuity type product.

    Or am I being too negative?

    Rocky path for retirement income plans
     
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  18. b0b555

    b0b555 Well-Known Member

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    I agree with you. And the winners will be the annuity providers, not the fund members.
     
  19. Nodrog

    Nodrog Well-Known Member

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    Exactly. Bloody Challenger and others are sweating on this potential outcome.

    And pity the poor fund member who is forced into an annuity when interest rates are low. And what happens if the company / provider goes bust. Another HIH? In theory ones annuity should be safe but I wouldn't like to find myself in such a situation.
     
  20. Wiz of Aus

    Wiz of Aus Active Member

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    If it happens there will be a huge shift of focus to outside super wealth for a lot of folks IMO.