If you’re investing in anything other than a low-cost index fund, you’re likely to be a loser. Here's a link to my spreadsheet if you want to play around with it. Just be very careful. So before you switch to another fund (or take advice from some random person on Reddit), I’d suggest you focus on the only two things you can control: the percentage of your super you have in the sharemarket, and the fees you pay each year. The Indexed Balanced Fund has very low fees … it’s the cheapest pure play index fund in the country, with fees at 0.05%. The fund will invest in all the top 200 companies proportionately based on each stocks market cap. Hostplus’ Index Balanced super option appears very attractive on first impressions. Scott Pape is an independent, community-based, financial counsellor. Hostplus' infrastructure investments are selected to build a well-diversified global portfolio of managers and assets, which offers a strong mix of cash yield and capital growth. Let me rephrase that question, because it should read: Why do so many financial salespeople hate the Barefoot Investor? Performance as at 30.09.2020. Let me be clear, I don’t get a cent in kickbacks or hidden benefits for mentioning Hostplus, or any other financial institution. Traditional market capitalisation (‘cap’ for short) indexing works by allocating investment dollars based on the value of each company included in an index compared to the value of the index overall. The Indexed Balanced Fund has very low fees … it’s the cheapest pure play index fund in the country, with fees at 0.05%. I have strong reservations about whether a simple traditional market cap index fund will allow you to do that – particularly in a market that is not constantly appreciating. We’re like the flat-earthers of the finance world, openly questioning the ‘lower fees equal higher returns’ argument. The benchmarks used for this option include the S&P/ASX 200 Accumulation Index, MSCI World ex-Australia Index, Barclays Global Aggregate Index (hedged in AUD with net dividends reinvested), Bloomberg AusBond Composite All Maturities Index and Bloomberg AusBond Bank Bill Index. Anyway, of the thousands of super funds on offer, only a surprising few offer low-cost index funds like the ones I showed you above. Hostplus Indexed Balanced. I've been lurking for some time, gathering what morsels of knowledge I can. The Indexed Balanced fund composition is in there somewhere (just ctrl-f for it). "We certainly have seen a number of our retail competitors successfully promote their index options as low-cost options," Hostplus chief executive David Elia said. Hostplus' Balanced Option is our 'flagship' default investment option for superannuation members. indexed balanced allocate 75% shares , remaining are bonds, FDs & cash , so it's pretty large chunk on high growth/risk for mere 0.02% fee mrtin on 19/11/2018 - 22:41 The {{ modelPortfolio.name }} portfolio has fair and transparent fees to help you keep more money in your pocket. Enter your Username and Password to access your account and start managing your investments. The funds management industry is very good at marketing products, historical returns (back tests) and methodologies. "In our view, if members truly want cheap, index-style investment options, let's give it to them. I wrote the book like I was sitting at the pub with my best mate, explaining how I manage my money. In addition, because they are rules-based, we can back-test performance over many decades. Sorry without Javascript enabled your experience on this site may be hampered. https://www.facebook.com/HostplusSuper/videos/726999524838011 I used the PDS and historic returns. "There are no margins attached to our underlying investment fee. These indexes are reweighted every so often – typically every six months. The Hostplus Industry Super Property Trust – Property Investment Option provides access to a diversified portfolio of Australian property assets across the commercial, retail and industrial sectors. Yet don’t take it from me … take it from Warren Buffett: When Buffett dies, he’s requested that his entire estate be invested, on behalf of his wife, as follows: 10% into short-term government bonds, and 90% into an ultra low-fee S&P 500 index fund, which automatically tracks the 500 largest companies in America. And the result is … last year Aussie super funds swiped $32 billion in fees, which over the long term robs future retirees of hundreds of thousands of dollars from their nest eggs. The Indexed Balanced has been criticized in the past based on its actual performance net of fees vs other more expensive options and for its high level of holdings in cash (0 to 20% vs 5% in the Rest Balanced - Indexed option). Returns for periods greater than 1 year are annualised. Almost eight in ten (77 per cent) Aussie share funds underperformed a simple low-cost index fund. Get notifications in real-time for staying up to date with content that matters to you. Some material is copyright and published under licence from ASX Operations Pty Limited ACN 004 523 782 ("ASXO"). "AMP Flexible Super Core, which is our default fund, is competitively priced and charges the lowest fees compared to the average top 10 industry funds, the average top 10 retail competitors' key products, as well as index options," the spokesperson said. Traditional index has performed well over the past few years because the US and Australian stock markets have been consistently rising – almost all shares have done well. The value of the top 200 companies in Australia is circa $1.72 trillion. There are several evidenced-based passive strategies to use as an alternative to traditional indexing. Here are a few alternatives and their performance compared to the traditional index over the long term: The above data suggests that non-market cap index strategies can generate excess performance of in the range of 1% and 2.5% p.a. From a previous post of mine: My Unisuper is set to 40% Aus shares, 25% International, 25% Global in Asia and 10% Global Environmental. or less). Investments through diversified investment portfolio, including some growth assets and some lower risk investments. Here's a link to my spreadsheet if you want to play around with it. (That’s more than 20 times cheaper.) I trust that ProSolution is really acting in my interests as their client and I would not hesitate to continue to engage their services." AMP Flexible Super charges in its most simple form, the core balanced index option, about $403 a year. Because it’s the cheapest fund in the country, if not the world. does not include fees charged within any ETF held in this portfolio, estimated to be approximately 0.18% (indirect cost ratio). Call the National Debt Helpline on 1800 007 007. 2.4: 11.0-0.5--1.7: 8.6-2.7: 4.0: 4.8: 43/322: 33/322: 38/322--Quartile Ranking: 1: 1: 1--Performance Criteria. In other words, on a balance of $50,000 I get charged just $88. Before you go, why not grab your FREE copy of my weekly Monday newsletter? We sold 80,000 copies the day it was first released. It is for educational purposes only, and does not constitute formal financial advice. Therefore, CBA’s market cap represents 8.1% of the ASX 200 index. The Hostplus Indexed Balance Fund charges just 0.02 per cent per annum, plus a member fee of $78 per year. As such, many people believe price is not always a reliable indicator of long-term value. Hostplus’s Indexed Balanced Fund isn’t the only cheap super fund. No. These hedge funds were not only run by the sharpest investors on Wall Street, but they were able to invest in whatever they wanted — sophisticated private equity deals, complicated derivatives, gold, stocks, property, infrastructure, Bitcoin — and they could invest anywhere in the world they thought was hot to trot.

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