Superannuation direct investing outside of SMSF

[IB12]

I actually came across this thread because my Industry Superfund (AGEST) got acquired (merged with) by AustralianSuper recently.
So they are moving all my funds across to AustralianSuper.
I like Industry Super funds because they are low cost, I can get my returns with them through self directed investor options, and it's piece of mind and less time consuming. I don't have to manage all the paper work and time consuming compliance duties. My time is very important to me ... and I don't want to waste it with compliance, accounting and auditing.

Was thinking about setting up a SMSF with eSuperfund, and trade/invest with InteractiveBrokers (IB).

I already trade with IB, and am happy there.

However came across the fact that AustralianSuper have a direct investing option at a very competitive price/cost base compared to most DIY SMSF providers. If I can get my returns with the way it is structured at AustralianSuper then I"ll stay with them.

One thing I like about AustralianSuper is that they give you access to UBS research.

Anyone can give me any insights on which way forward?

AustralianSuper pros:

• Save time
• Cheap/low cost
• Access to UBS research (spill over benefits for my IB trading)
• Safe, stable industry super fund that you can rely on

Australian Super cons:

• High brokerage costs at $15/trade
• Still limited in total flexibility of investment choice i.e. ASX300 shares, international ETFs, and DIY pre-mixed investment options (this can be a good thing if you're a know nothing investor/trader)
• Costs might be more expensive as your account balance gets larger than 100K i.e. $180 p.a. for member direct option + ~0.6% p.a. of account balance for standard superannuation account administration costs + $15/trade. Works out to be about ~$780 p.a. before any brokerage costs.

eSuperFund Pros:

• Cheap/low cost- flat $700 fee, regardless of size of account or number of transactions made. (this excludes brokerage costs. If you're with IB it's about $6/trade asx equities, or $1/trade for US based equities, $5-$15 for futures contracts etc + $20/per month for data from IB. If you're with Comsec option then it's probably more expensive than AusSuper since Com$ec charge $19/trade).
• Can use Interactive Brokers to trade

eSuperFund Cons:

• Your share/future holdings are held on trust by IB, not under your chess account HIN (effectively you are an unsecured creditor)
• Maybe some issues regarding long term viability/stability/safety compared to an established Industry Super fund like AustralianSuper (i.e. you don't want an armageddon event to happen to your SMSF like MF Global)
• More time consuming - matters if time is money and is important to you.

On my analysis, AustSuperFund's direct investing option works out to be cheaper if you don't trade much (i.e. less than 20 trades per year) and have a small account balance (less than 100-200K).
This is especially true if you end up using Com$ec with eSuperFund.

Thanks.

 

[IB12]

I forgot to add, for all SMSFs there is an ATO Levy. Which I think costs around $200/year.

 

[So_Cynical]

I'm not totally clear on what the answer was, is it possible to make it clear please?

was it Yes, or No?

No...you only pay 0.6% p.a. of the account balance for standard superannuation investment options (the funds you have in the normal part of the super)

 

[GG999]

No...you only pay 0.6% p.a. of the account balance for standard superannuation investment options (the funds you have in the normal part of the super)

Many thanks for making it clear, So_Cynical (had me a bit concerned when reading previous discussion, but I wasn't sure how to read things)

I presume that's why the Funds offering this type of thing will always insist that you keep a certain % of your funds in the investment options so that overall they can get the fees to pay for everything.

Unless they are hiding fees somehow, they couldn't be making much from the Member Direct

They are planning to bring in Direct Shares for people in pension phase - hopefully one can transfer shares directly from Accumulation to pension account (although I couldn't get that answer from them from an email enquiry - I was wondering whether one might have to sell the shares and pay the Capital Gains tax on the profits and then rebuy for a pension account)

 

[GG999]

I forgot to add, for all SMSFs there is an ATO Levy. Which I think costs around $200/year.

I had a pension account with AGEST and a smaller, Accumulation account also with AGEST to which I was salary sacrificing.
Because of the upcoming 'merger', and because like you I was wondering about SMSF or Member Direct type of thing, I decided to transfer the Accumulation account to AustralianSuper.

Firstly, the money took 2 or 3 weeks longer to appear in the AusSuper account than it was supposed to - not a major problem compared to what some other people have had to go through I've found out since. I'm pretty sure it was a problem at AusSuper's end, and not any fault of AGEST.

In general I've found the people manning the phones at AGEST very helpful. Unfortunately can't say the same about AusSuper although to be fair I've only talked to them a few times thus far.

Maybe the merger has been very carefully planned and all will go through smoothly.

I'm very happy with the Direct shares in AusSuper. And if time is a very big factor for you then it could be a good solution. The website is a bit clunky but in the end you can get all of the information that you need.And maybe I'll find my way about more quickly the more I use it. I use Commsec to check on current share price, info about companies because that's what I'm more accustomed to. I always use limit bids and when entered on the Member Direct webpage I see my bid appear on Commsec within a minute - much faster than I've seen someone else claim that it happens.

Because I'm looking at smaller and smaller companies I'm finding the ASX300 to be a bit of a limit - or at least if you're getting interested in a particular company, check that you are able to buy it through the Member Direct before getting too committed to it. My alternative is to wait for dividends and then buy the smaller company through my Commsec account

(odd, but I couldn't reply to your previous, longer post)

 

[So_Cynical]

Unless they are hiding fees somehow, they couldn't be making much from the Member Direct

Brokerage...there is no way they are actually paying $15 for a small trade..not with 42+ billion under management, they must pocket a couple of bucks on every trade.

They are planning to bring in Direct Shares for people in pension phase - hopefully one can transfer shares directly from Accumulation to pension account (although I couldn't get that answer from them from an email enquiry - I was wondering whether one might have to sell the shares and pay the Capital Gains tax on the profits and then rebuy for a pension account)

I did see something about this, hope they do it cos it would really suit me.

Firstly, the money took 2 or 3 weeks longer to appear in the AusSuper account than it was supposed to - not a major problem compared to what some other people have had to go through I've found out since. I'm pretty sure it was a problem at AusSuper's end, and not any fault of AGEST.

I found AustSuper to be very slow at doing pretty much everything.

In general I've found the people manning the phones at AGEST very helpful. Unfortunately can't say the same about AusSuper although to be fair I've only talked to them a few times thus far.

AustSuper like to boast about how good they are at customer service, however i have found that although its easy to talk to someone on the phone, the customer service people haven't got a clue..i get the feeling that the phone centre is there to appease customers who also don't have a clue and ring up asking the same 5 or 6 questions.

Because I'm looking at smaller and smaller companies I'm finding the ASX300 to be a bit of a limit - or at least if you're getting interested in a particular company, check that you are able to buy it through the Member Direct before getting too committed to it.

A couple of things to be aware of

Just because a stock code appears in the drop down and then box, doesn't mean you can always buy it...i think that some stocks that have dropped out of the ASX300 still appear in the stock list so holders can sell them...but the rest of us cant buy them.

You can only place a limit order within (i think) 8% of the last buy price (limit buy order under the last sale price) and 5% of the last sell price (limit sell order above the last sale) something like that.

EG: when placing a sell order over night, and the closing price was $1.00 the system wont accept an order above $1.05 you get an error message (to far away from the current price) annoying but ok when you get used to it.

 

[GG999]

Brokerage...there is no way they are actually paying $15 for a small trade..not with 42+ billion under management, they must pocket a couple of bucks on every trade.

If that's what others mean by 'hidden fees' then I think I'm ok with it. I might like the brokerage to be lower, but at least I know what that cost is.

A couple of things to be aware of

Just because a stock code appears in the drop down and then box, doesn't mean you can always buy it...i think that some stocks that have dropped out of the ASX300 still appear in the stock list so holders can sell them...but the rest of us cant buy them.

You can only place a limit order within (i think) 8% of the last buy price (limit buy order under the last sale price) and 5% of the last sell price (limit sell order above the last sale) something like that.

EG: when placing a sell order over night, and the closing price was $1.00 the system wont accept an order above $1.05 you get an error message (to far away from the current price) annoying but ok when you get used to it.

I hadn't realized any of that, so much appreciated

I just started to check the ASX300 and what shares are available in Members Direct.

Firstly, if I do a 'Quick Stock Quote'
e.g for WOW - at top of page it says ASX300 Yes
and for REA - ASX300 No

On Commsec, WOW is shown as being 3.2% of the ASX300 and 2.9% of the All Ords
Whereas REA is only shown as 0.18% of the All Ords.

REA market cap 2455 million. Number of shares outstanding, and the share price has only really gone up and up
Actually, so I can't see why REA was part of the ASX300 and isn't anymore

Anyway I'm glad you pointed this out, and now I know that I can do the 'Quick Stock Quote' to see if it is available to be bought in the Member Direct.
Actually a listing of current available shares on the AusSuper site would be the simplest thing - I didn't find that in the past, I'll go searching for it again now

How many stocks are there in the ASX300, by the way?

 

[sydboy007]

The AustSuper memberdirect is good if all you want is to invest in the top 300 and ishares ETFs

You can't buy any of the hybrids or interest style securities, and no access to the smaller end of the market which rules out a lof ot he better yielding stocks now.

I found it too restrictive for my liking so moved to a SMSF, but if your needs are simple then it can be a cheap option for you.

I think the trades are move expensive than $15 though. Was pretty sure that my 10K trades were costing around the $30 mark.

The thing I like most about a SMSF is I know have complete visibility of where I generate my returns from - income / capital growth. Maybe I'm too much of a control freak, but it's giving me a lot more confidence about how my investment strategy is going

 

[Julia]

How many stocks are there in the ASX300, by the way?

300.

 

[GG999]

Well, I've been looking, but I haven't found a source that simply gives you a list of the S&P ASX300 index.
I actually registered at the S & P site to get the info directly from them, but the listing I was able to get looks like a year or so out of date.

I found a pdf on the ASX site - current as of September 2012 - but that doesn't include changes made in Sept 2012 such as inclusion of BRG, MAD, MLD etc and exclusion of CLR, GOR, KRL etc.

I think the best thing I've found so far is using Commsec and going 'Research Tools' -- 'Company Search' -- 'Company Statistics' -- select Field 'Indices' -- option 'equal to' and choose S&P ASX300

I wonder if all of this data is directly from S & P (and thus only changed twice per year) or whether it is modified by Morningstar whenever a change is needed - for example, SCP is in the ASX300 - but the S&P wouldn't have included it back in September.

If you know of anyone keeping an up-to-date list hopefully you'll let me know.
Meanwhile I'll assume that the list obtained from Commsec is ok and I'll check whether it is just those stocks that can be bought through AusSuper e.g are the new entrants such as SEA, SKE already available through the Member Direct site

 

[Trembling Hand]

Huh?

http://www.asx.com.au/documents/resources/sp_asx_300_v2.pdf


Or,

View attachment SPAUSTA300AUDFF--P-AU----Constituents.xls

 

[GG999]

Huh?

http://www.asx.com.au/documents/resources/sp_asx_300_v2.pdf


Or,

View attachment 50451

Thanks Trembling Hand

Just saying that the most up-to-date list I've found so far is by going through the Commsec site (Morningstar I presume is the source)

So for example, the listing I have from Commsec doesn't include BTA, IGR, IDL whereas they are listed in that pdf and in that spreadsheet.

For people interested in the AustralianSuper Member Direct - they appear to be using the most up to date list as far as I can see. If you look for a recent S & P ASX300 addition then it shows up with a BUY and SELL button.

If you look for a stock that has just dropped out of that index then it still appears, but with no BUY button. There's no SELL button either which is the only odd thing

 

[GG999]

Thanks Trembling Hand

Just saying that the most up-to-date list I've found so far is by going through the Commsec site (Morningstar I presume is the source)

So for example, the listing I have from Commsec doesn't include BTA, IGR, IDL whereas they are listed in that pdf and in that spreadsheet.

For people interested in the AustralianSuper Member Direct - they appear to be using the most up to date list as far as I can see. If you look for a recent S & P ASX300 addition then it shows up with a BUY and SELL button.

If you look for a stock that has just dropped out of that index then it still appears, but with no BUY button. There's no SELL button either which is the only odd thing

But the versions you found are more up to date than what I had found originally - I'll have to look around the ASX site to see how that happened - well spotted.

 

[So_Cynical]

Not 100% sure how accurate this ASX300 list is.

http://www.asx300.com/

 

[systematic]

300.

296, last I looked

 

[systematic]

Well, I've been looking, but I haven't found a source that simply gives you a list of the S&P ASX300 index.
I actually registered at the S & P site to get the info directly from them, but the listing I was able to get looks like a year or so out of date...

...If you know of anyone keeping an up-to-date list hopefully you'll let me know.

Hi GG999,

Go to the new site

Click on the constituents tab on the right hand side

Click on "full constituents list" and you will get a csv, last updated 31st December 2013

Have attached for convenience

Hope this helps...

View attachment ASX300 31.12.2012.xlsx

 

[GG999]

Not 100% sure how accurate this ASX300 list is.

http://www.asx300.com/

No, like many other lists it is out of date. This would all be easier if every listing had a 'last modified' date at the top! Thanks anyway.

Hi GG999,

Go to the new site

Click on the constituents tab on the right hand side

Click on "full constituents list" and you will get a csv, last updated 31st December 2013

Have attached for convenience

Hope this helps...

View attachment 50461

Yes, this is probably the best source.
I had the old site bookmarked and had gone there, so I guess that's why the listing that I downloaded was not up-to-date.

And going to the new site - I thought that they were only showing the top 10 in the index - I wouldn't have noticed how to get the complete listing without your directions so many thanks.
So that's all sorted now

On the number of stocks comprising the indices - I notice in the methodology that they say that the ASX 200 comprises 'the 200 largest index-eligible stocks listed on the ASX by float-adjusted market capitalization'

Whereas for the ASX 300 it is 'up to 300 of the largest securities'
I guess that with the smaller companies that there are so many mergers, take-overs etc that they don't want to be committed to always having exactly 300 in the index at all times.

The actual number was 292 in an older version that I had downloaded, and yes it is 296 in this most recent one.

 

[systematic]

...Cool. Like you've already done (but for others) - the index construction pdf's are worth a read (for anyone that is interested in indices).

 

[Mr J]

Thats the biggest mistake with super. Why grow something and make it your second or even first biggest investment with something so friggin restricted?

A cent hasn't gone into my super for 5 years now, from anywhere. And I cannot see that changing.

Agree, but do you mean nothing additional has gone in, or nothing at all? I would love to know how to put an extra 9% in my pocket to use as I see fit!

 

[Trembling Hand]

nothing at all?

You only pay 9% if you are a wage earner. Simple don't work for someone.