POWERED BY MOMENTUM MEDIA
(April-2002) Size is the key to cheaper funds
Industry funds would be even more attractive and able to charge “radically lower” fees if they held much larger member balances, Industry Fund Services executive chair Garry Weaven told CMSF delegates.
He said there were currently 132 industry funds, which had an average fund balance of $5,590 and charge an annual administration fee of $76 or 1.35 per cent, rising to $249 or 0.50 per cent for account balances of $50,000.
This was in contrast to the 260 retail funds with average fund balances of $18,350 and which charge $134 or 2.40 per cent, rising to $1,200 or 2.40 per cent for account balances of $50,000.
“What that actually tells you is one simple message: if industry funds with their substantial fixed administration charges could have large member balances, they would be radically cheaper than the average retail fund,” Weaven said.
He noted that over 20 years, a one per cent asset charge resulted in an 11 per cent reduction in superannuation benefits, while over 40 years this rose to 22 per cent.
AUTHOR
Mike Taylor
Recommended for you
The corporate regulator has launched civil proceedings against Equity Trustees over its inclusion of the Shield Master Fund on super platforms it hosted, but other trustees could also be in the firing line.
The shadow minister for financial services says reworking the superannuation performance test to allow investment in house and clean energy risks turning super into a ‘slush fund’ for government.
Australia’s superannuation sector has expanded strongly over the June quarter, with assets, contributions, and benefit payments all recording notable increases.
The Super Members Council (SMC) has called on the government to urgently legislate payday super, warning that delays will further undermine the retirement savings of Australian women.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
74.26 3 y p.a(%)
2
Global X 21Shares Bitcoin ETF
72.60 3 y p.a(%)
3
Global X GlobalX FANG+ ETF
44.46 3 y p.a(%)
4
Pengana High Conviction Equities B
39.12 3 y p.a(%)
5
Pengana High Conviction Equities A
39.05 3 y p.a(%)
