Index fund manager, Vanguard Australia, has launched its first superannuation product after months of delays.
The fund manager had first announced plans for the fund three years ago but its launch was pushed back until 2022.
It said the new fund would offer “simplicity, transparency and a low-cost investment approach to deliver a highly sophisticated but easy to understand superannuation offer”.
The offer would be an accumulation product called Vanguard Super SaveSmart, which included a MySuper default fund called Lifecycle, plus a range of index-based diversified and single sector investment options.
Lifecycle would adjust 36 times over a member’s lifetime providing age-appropriate asset allocations and automatic de-risking.
The default option annual fee was 0.58% which the firm said was the lowest in the market for member balances below $50,000 and for members younger than 47.
Lifecycle members aged 47 and under were invested in a diversified portfolio with a higher allocation to growth assets. From age 48, the Lifecycle investment undergoes a series of annual changes reducing the allocation to growth assets, while increasing the allocation to defensive assets.
From age 82 onwards, the asset allocation was designed to have a greater emphasis on reduced risk to shield retirement savings from the impacts of volatility.
Vanguard Australia managing director, Daniel Shrimski said, “Vanguard believes saving for retirement shouldn’t be complex. That’s why we’re delighted to launch Vanguard Super, a compelling new offer that combines real simplicity with smart, global investment expertise. We want to deliver members a low-cost, high-quality super fund that includes a default offer designed to move with them right through life.
“As the first new entrant into the Australian superannuation industry in years to gain an RSE licence, and launching despite industry consolidation, we’re here because we truly believe we can improve retirement outcomes for Australians and be a catalyst for much needed change in the industry.”
Bye Bye Industry Super.
The 30bps administration fee (+5bps ORFR fee) is disappointing, that’s hardly “cheap” as balances grow.