Vanguard Super?

Vanguard plans to tackle locals in super

Vanguard plans to tackle locals in super

 

I would have concerns with such a fund. While it may offer diversification its still like putting all your investments in AMP / Colonial etc funds. I can bet you they wont diversify into Blackrock so the risks are magnified with self-interest issues and amplified risk issues. Unsure how APRA would see that risk being managed. Its like BT SuperWrap using only Westpac cash, Westpac shares and Westpac managed funds and never anything else. How are the clients best interests being met ?

Who would the fund trustee be that says - Hey lets sell down all our Vanguard because the whole thing is badly managed and overpriced ? Nobody.

 

Any more news on this?

 

Michael Lovett will return to Melbourne from Vanguard's US head office to lead Vanguard Australia's planned superannuation offer in January 2020.

Vanguard Australia managing director Frank Kolimago said: "Michael's significant experience puts him in a strong position to lead our superannuation undertaking as we develop this new offer with both individual investors and financial advisers in mind."

In November last year a spokesperson confirmed the super offering won't be a strictly direct-to-investor product and will have a place for financial advisers.

"We are at the start of a journey of entering the superannuation market," Vanguard head of corporate affairs Robin Bowerman said at the time.

"We are under no illusion that it is a lot of work to get a license and then to get a product to the market."

The timeline for the launch of Vanguard's new super product is unclear but a spokesperson confirmed to Financial Standard Caldow's appointment is part of the investment giant pushing ahead with the new offering.

 

That makes sense.

 

I was about to say that I was unsure what this actually meant LOL (!). Can you tell me what you think this statement actually means please?

 

Who knows. Vanguard is a large retirement product provider overseas. I could see some scope for super outflow products rather than investment products. Or more complex products. eg deferred annuities, cap and floor pension products, even international or commodity hedge products attached to a ETF, defined benefit style products, capital protected ? etc.

ASIC wont want a fund that sells only its products pots. Look at AMP. There is a push for several mega funds and far fewer super players to deliver cost efficient returns.

 

Vanguard forfeits $100b ahead of assault on big super

 

So... does that mean that all the super funds using Vanguard as an underlying investment option will be left in the lurch by Vanguard? (Sun Super, FSS etc)
Also, I wonder about Investment (Insurance) Bonds that use Vanguard as an investment option, will they also have to be withdrawn?
Maybe I'm understanding this wrong?

 

Not quite.

Funds can still buy. Its funds which engage and use Vanguard as a "manager". Most members are not aware that most funds contract out some or all "management" of a strategy. Often its a small panel of "managers" but in some cases its not. eg (made up example) SunSuper may offer a investment option for "Indexed" and may engage Vanguard to manage this and it may be a a non retail investment using what is called a PST (Pooled Super Trust). It a wholesale product not a listed retail product and will be similar to their ETF but specifically different eg management fees ? Ratio of mix etc. Vanguard may (?) offer a PST for indexed which is what they use in place of the listed retail ETF. I beleive its these that will be wound back according to the AFR :

It will stop providing customised portfolios to these third-party funds, but continue to offer off-the-shelf pooled investments to the institutional market. The wind-down is expected to take up to 24 months.

For example read page 15 of this PDS for sunsuper. The single asset manager for local and intenational index could be Vanguard.
https://www.sunsuper.com.au/library/media/pdfs/pdss/sunsuper-for-life-investment-guide.pdf
To identify who manages each you may need the data from ChantWest. They report all this.

Funds can still buy listed investments or direct acqusition. Blackrock will fill the gap I imagine and I would imagine a gradual process would see Vanguard investments wound back over an extended period. And some funds wont be impacted. They may already have their own managers. Or a panel.

It could end a little like the Kraft peanut butter (Vanguard) and sliced cheese and Bega (Blackrock).

 

OK! Thanks heaps for taking the time to explain that - very much appreciated.

 

Vanguard page to register interest in their superannuation offering Vanguard Investments Australia

 

Done

 

Vanguard Investments Australia

See what it looks like when released

 

https://www.smh.com.au/money/super-...ash-the-super-party-20210308-p578p7.html?btis

 

Yes it was launched in the UK (under a slightly different super model) and its very low cost. Min amounts of UKP100. Thats the investment fee element. In the UK its 0.15% and a max annual fee as well. 77 ETFs are available in the UK.

In Australia the model is different as super is a trust concept with a bit more compliance. This will add to costs (much like a smsf). No info known yet.

That SMH article reported another issue. Industry Funds tend to get preference to member choice by employer actions to encourage the industry fund (unions !!). How will Vanguard crack the gap between SMSFs and industry funds ? Vanguard appears to be creating a master "fund" with a custodian and member reporting to allow trades. I have questions concerning insurances and mysuper issues (eg Mysuper requires a life cycle strategy that considers members age and it automatically tapers risk down). IF its not Mysuper it will limit access to new contributions and sit as a duplication with another fund which is contrary to Govt policy which wants ONE account per taxpayer. Vanguard may need a mysuper account split alongside a member directed split (under one account). A sweep from time to time into the member directed perhaps ??

MySuper | Treasury.gov.au

 

I am also keen to know how the Insurances gonna work with in VG Super

 

Subscribed with interest.

 

Here are the 2 UK versions
Vanguard: Helping you reach your investing goals | Vanguard
Vanguard: Helping you reach your investing goals | Vanguard

 

Any news on Australia front? It’s been very quiet here.