Australian (ASX) Stock Market Forum

Montgomery Fund for Super?

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Aussiesteve said:
I'm thinking of moving my super to the Montgomery Fund
Any thoughts anyone.
Click to expand...

Aside from any due diligence on the fund etc, I assume you like the investment philosophy of the fund and are confident they'll stick to their style etc.

It worries me a little that you mentioned the 3 year outperformance - it makes me want to ask what weight you place on that. I wouldn't place much on that (either good or bad).

Obviously if that's your Super balance, you are prepared to have your Super 100% invested in Aus/NZ equities.

My comment so far isn't very interesting - pretty basic stuff. I'll try and make it more interesting. You asked for any thoughts...so here is why I couldn't personally invest in the fund (even though they might be wonderful). Whether the details are proprietary or not, they don't take a purely quantitative approach. I couldn't be comfortable that there's going to be no style drift. I just couldn't trust my funds to someone else's qualitative assessment of things. But that's me.
 
Thanks Systematic,
here's my simplistic goal. I have just 220k in super, I'm 53 and I'm told that's not enough to retire on although I know that its all relative ( my wife has only 22k). I've been doing voluntary contributions of 4% for 10 yeasr or so. So my simplistic goal is to find a fund that returns 10-15% average annual returns and hopefully that will help bridge the gap. I have about 30 k in Aust shares and have been averaging 15%
Maybe I should look at the SMSF option - I realise that its a bit of work but am prepared for that if that's what it takes.
 
Aussiesteve said:
Thanks Systematic,
here's my simplistic goal. I have just 220k in super, I'm 53 and I'm told that's not enough to retire on although I know that its all relative ( my wife has only 22k). I've been doing voluntary contributions of 4% for 10 yeasr or so. So my simplistic goal is to find a fund that returns 10-15% average annual returns and hopefully that will help bridge the gap. I have about 30 k in Aust shares and have been averaging 15%
Maybe I should look at the SMSF option - I realise that its a bit of work but am prepared for that if that's what it takes.
Click to expand...

If you have the interests and the time, I think it's better to let your money be managed by actually business managers - the CEOs and executives of actual companies doing actual work.

That is done by studying them and the business, then buy ownership (through shares) into the enterprise.

You would gain two main advantages with shares if you see shares as a fractional ownership in a business.

One, the market is pretty crazy. Some shareholders and fund managers can make mistakes or have other better opportunities (they think, mostly they're making mistakes)... and when they do make mistakes, you can buy into the business for cheap or very cheap. With relatively small sums, we don't need that many fund managers to make mistakes to find opportunities.

Two. If you get in at a cheap or even a fair price... and the business is established and run by able management... you money is in effect being managed by these proper managers of business. If a business could return good earnings on equity or capital, and you didn't overpay for those potentials, and the business is large and diversify in its operations enough... that is much better than giving the cash to some armchair warriors.

With fund managers, unless it's one of those listed fund, it's hard to know what you're getting.

To know if the price is reasonable to buy those funds, you would have to study those assets and holdings. If you could do that, might as well do it yourself and not listen to them.

But if you just hand the cash over and they look after it... You really have to trust and know the manager and have enough muscle that they'd look after your interests and not their own.

How can you be certain of that? Historical performance do not reflect future performance is their claim.
Rating agencies only give opinions... and opinions can be bought and influenced, especially when it pays so well and they can't be sue.

----

You're probably saying... if I don't know what I'm doing with stocks.

First, you think they do?

Most managers probably don't have a clue what's going on in most of the companies they're diversifying into.

If their business and their income depends on the percentage of the funds under their management... it's an incentive to get more funds to manage, not to know the assets they're buying. They also only have 24 hours in a day, half of it is sleeping and golfing, the other half meeting and greeting investors, what's left is the lunches and yoga or something.

Second, fund management is one of those crazy business where it does not pay a manager to do what is right by his judgement of the business and its assets; but pays to do and follow what is popular.

Say a manager find great value in oil stocks, or in commodity stocks at the moment. Not many will invest in it because the trend is going down and prices does not look like it'll get up anytime soon.

Imagine making a call and the stock collapsed on you. No bonuses, threats from investors, bad numbers you'll have to report each quarter. Why the headache when following the crowd will get you your bonus and a promotion when things goes well; and when it crashed, well the entire market is also crashing.

---

If it took you most of your working life to save up that nest egg... maybe don't expect it to be easy to have it grow quicker and faster without much work.

If you want Monty or other managers to look after it... the hard work will be to talk to them, to know their thinking and their character. From memory Monty wouldn't even want to take your money unless you have $1M for him to play with.

The other alternative is to allocate capital yourself... to study companies etc. That's not easy either. But I don't think making money anywhere ever is.

Then the third is to buy into an index and hope Armageddon won't happen and Australia will still be alright over time.
 
Aussiesteve said:
Thanks Systematic,
here's my simplistic goal. I have just 220k in super, I'm 53 and I'm told that's not enough to retire on although I know that its all relative ( my wife has only 22k). I've been doing voluntary contributions of 4% for 10 yeasr or so. So my simplistic goal is to find a fund that returns 10-15% average annual returns and hopefully that will help bridge the gap. I have about 30 k in Aust shares and have been averaging 15%
Maybe I should look at the SMSF option - I realise that its a bit of work but am prepared for that if that's what it takes.
Click to expand...

The relevance of 220K is subject to what you are used to living on. Some assumptions (could be entirely wrong) based on your location, 220k @ 53 and a retirement age of 67 is a good base to achieve a typical Tassie Median retirement income (supplemented with Social security) without taking on too much additional risk.


Any attempt at increased return exposes you to increased risk. You can learn to manage that increased risk with time and effort and passion or you can delegate it to an external manager for a cost. But the question becomes how do you pick an external manager that will be good at managing risk on your behalf. As a fund manger Montgomery will take his fees irrespective of future returns achieved and personally he would be my last choice as a risk manger. He's blown up in the past and perhaps his since inception returns this time around are flattered by front running his fan base when FUM were small enough that it made a difference. He's good at building FUM but I don't rate him as an investor (maybe some of the guys he's employed as portfolio managers are better???).
 
What craft said. Great encouragement re: the retirement savings.

Thinking out loud re: the fund stuff: if you are going to use boutique or niche funds (or whatever they're properly called)...I would at least encourage you to think about diversifying - managers and styles.
 
systematic said:
What craft said. Great encouragement re: the retirement savings.

Thinking out loud re: the fund stuff: if you are going to use boutique or niche funds (or whatever they're properly called)...I would at least encourage you to think about diversifying - managers and styles.
Click to expand...

Alternative to investing with a Managed Fund is to use Exchanged Traded Funds (ETF). ETF could be cheaper than using managed funds, the pricing is done daily and they are listed on the Australian Stock Exchange.

ETF pay distributions just like shares and they will give diversification as well, this may achieve your objectives with income for retirement.


Kind Regards


Christianrenel
 
Thanks for those insights.
Since yesterday, I've been looking into another alternative which is a superannuation fund that allows you to pick your own stocks (not just your risk profile). THere's one called Netwealth and they offer a product called Super Accelerator Plus . Anyone come across it - I could find nothing here on ASF ? If its what I think it is, it could give me the best of both worlds - the protection of a retail super fund and the flexibility I would have associated with an SMSF ( in fact their tag is " Just like an SMSF with less administration)
THey charge 0.59% pa for management fees
Here's their reply to my query
"...As I mentioned, our personal super offering (Super Accelerator Plus) gives you an online investment platform to access local & international shares, term deposits and 300 individual managed funds ( including Roger Montgomery) using your personal super.

Link: "http://www.info.netwealth.com.au/SA_campaign/superwrap-personal-super-for-investors"]link [/URL]or in the attached booklet and the full managed fund menu here
 
Hi Aussiesteve

Type in value.able or valuable into the search engine. Type in Roger Montgomery into the search engine and you will find a variety of threads written here with a variety of opinions. When I was very uneducated, I thought Roger's advice was great. Well I still think his advice is great but only six-twelve months prior to his public statements or 12-18 months later. I am trying to be unbiased and would recommend that you read some of the threads here and make up your own mind. I personally think what he says publicly is different to what he does behind the scenes. He has to back his sales skills with some results. At least he brings the topic of investing to the masses. (Many ppl's opinions are not the masses.)

I switch Super from MLC (with very high fees) to AustralianSuper (lower fees) about 3.5 years ago. It has made a big difference to my Super. I am not confident enough to select my own stocks for Super, so I use 50% Balance, 30% Australian Shares and 20% International Shares. I may change this next time I really review my Super??? Obviously the experienced guys will see my mistakes that I can't see in myself. With my Super worth not much, it is not worth it to start up my own SMSF. I think a minimum of 300K is required to due its high costs and there is so much compliance work involved.

Select Super helped me to decide to switch funds back in August 2012
http://www.selectingsuper.com.au/

If your stock selecting skills is excellent, then picking individual stocks is fine. This is too risky for me and my lack of emotional control could see me blow up my small Super. So I saved and saved a tiny amount of 20K and brought about 10 stocks. I have started a separate investing account. Already after 22 months, 2-3 stocks proved to be shocking selections. I only brought two stocks in 2015 but they are very good selections. 2014 was like a shopping spree.

Once you "get" the money/funds, going on a shopping spree is tempting and fun. Maybe now is the best time to go on a shopping spree?? For me, a low cost industry fund is fine. For yourself: study yourself first, then study your options. I have such a long way to go but at least I got out of a rip off retail fund.
 
Aussiesteve said:
Thanks for those insights.
Since yesterday, I've been looking into another alternative which is a superannuation fund that allows you to pick your own stocks (not just your risk profile). THere's one called Netwealth and they offer a product called Super Accelerator Plus . Anyone come across it - I could find nothing here on ASF ? If its what I think it is, it could give me the best of both worlds - the protection of a retail super fund and the flexibility I would have associated with an SMSF ( in fact their tag is " Just like an SMSF with less administration)
THey charge 0.59% pa for management fees
Here's their reply to my query
"...As I mentioned, our personal super offering (Super Accelerator Plus) gives you an online investment platform to access local & international shares, term deposits and 300 individual managed funds ( including Roger Montgomery) using your personal super.

Link: "http://www.info.netwealth.com.au/SA_campaign/superwrap-personal-super-for-investors"]link [/URL]or in the attached booklet and the full managed fund menu here
Click to expand...

Hi Steve, check out ING Living Super, I have an account with them and I find them very good. Link here: http://www.ingdirect.com.au/superannuation/living-super.html

I can invest in any of the ASX 300 stocks (currently ASX 200 stocks but going ASX 300 on Feb 1st), plus ETF's and LIC's. It is listed on their website as to what you can or can not invest in. From February 1st. 2016, if you take the ASX shares option (pick your own) you will be charged $25 P/M or $300 per year (plus brokerage), that's it, no more fees unless you choose a manged fund. There are no fees for cash, term deposits or their Balanced Fund. It is the closest thing to a SMSF without the hassles.

They do all the reporting to the ATO, work out all the buy and sell orders (profits and losses) and you do not need to get audits or file tax reports, they do it all for $300 a year. Note: This is for the ASX 300 Trading Option if you want it.

If you do not want to do any of the work yourself then they have their own managed funds which you will pay for. Anyhow it's best you look at that link yourself and see how you go. But I will say, I have been with them 3 years and it is very easy to operate, all I have to do is pick my own stocks and allocate capital accordingly. All the best.
 
Bill M said:
They do all the reporting to the ATO, work out all the buy and sell orders (profits and losses) and you do not need to get audits or file tax reports, they do it all for $300 a year.
Click to expand...
Plus the accounting for dividends too Bill. ;) Those precious divvies that partially offset portfolio drawdowns.
 
Wysiwyg said:
Plus the accounting for dividends too Bill. ;) Those precious divvies that partially offset portfolio drawdowns.
Click to expand...

That's right. The ETF's I invest in have anything from 2 to 5 types of payments. The distribution in cash, the franking credits, the deferred amounts, foreign conduit income, partnership and trusts other income:eek: My heads spinning just thinking about it. They do the lot and I don't have to do anything.:xyxthumbs
 
Bill M said:
if you take the ASX shares option (pick your own) you will be charged $25 P/M or $300 per year (plus brokerage), that's it, no more fees unless you choose a manged fund.
Click to expand...

AustralianSuper charge $395 per year for the ASX300 share option (plus brokerage) and because you have to have some money in at least one of the managed options charge another $200 or so per year for that.
 
So_Cynical said:
AustralianSuper charge $395 per year for the ASX300 share option (plus brokerage) and because you have to have some money in at least one of the managed options charge another $200 or so per year for that.
Click to expand...

Yes I understand. With ING Living Super their "catch" if you can call it that is the "cash hub". You are required to keep 1% of your total holdings (or 10K max.) in that account for expenses. If you are on the pension account they require the same + 2 Monthly pension payments. In either case, I am pretty sure the max that you need to put in your "cash hub" is 10K. That money only earns 1.55% interest. There is no requirement to have any funds in any managed option if you do not want too.

Are you still with Australian Super? Still ok for you?
 
Bill M said:
Are you still with Australian Super? Still ok for you?
Click to expand...

Yes still with AustralianSuper, bitter and disappointed - using their platform with all their rules is a pain in the ass, and now they are gouging us for the privilege, they were always gouging us with their $18 brokerage and now the $395 kick in the teeth.

Im winding down the trading account as its been a failure, the ASX300 is just so limiting for me, not my style at all (contrarian averaging) i hold 4 stocks in the portfolio that have been dropped from the index and so cannot average down into them, 2 edged sword in that this has saved me some money and cost me quite a bit to.

Would of loved to have bought a parcel of Sedgman at around 50c but couldn't.
 
So_Cynical said:
Im winding down the trading account as its been a failure, the ASX300 is just so limiting for me, not my style at all (contrarian averaging) i hold 4 stocks in the portfolio that have been dropped from the index and so cannot average down into them, 2 edged sword in that this has saved me some money and cost me quite a bit to.
Click to expand...
LOL. Superannuation is a savings and investment vehicle for retirement.
 
So_Cynical said:
Im winding down the trading account as its been a failure, the ASX300 is just so limiting for me, not my style at all (contrarian averaging) i hold 4 stocks in the portfolio that have been dropped from the index and so cannot average down into them, 2 edged sword in that this has saved me some money and cost me quite a bit to.
Click to expand...

Sounds like you need your own SMSF. ESuperfund is around $1,000 per year from memory. What are you going to do?

By the way, brokerage with ING Living Super is $20 per trade or .13% of the trade, whichever is greatest.
 
I am also considering the 'build your own options' feature within my exisitng super fund (Catholic Super). The options are Australian Australian Shares
Overseas Shares
Property
Diversified Fixed Interest
FlexiTerm Deposit
Cash


I would have a mix of course but should I favour Australian or overseas shares or a better question: what would some of you tend to favour?
THese are the investment managers that CSF uses

Australian Shares
Acorn Capital
Allan Gray Australia
Colonial First State Global Asset Management
Cooper Investors
Denning Pryce
L1 Capital
Paradice Investment Management
RealIndex Investments
Renaissance Asset Management

Overseas
Shares
Aberdeen Asset Management
Acadian Asset Management
Colonial First State Global Asset Management
Copper Rock Capital Partners
Five Oceans Asset Management
Generation Investment Management
MFS Investment Management
Orbis Investment Advisory
QS Investors
 

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