Question 1: Hostplus recently launched a Self-Managed Invest (SMI) product that gives SMSF investors access to investments previously available to members only. This provides benefits of investing with one of Australia’s top superannuation providers, while maintaining control of your SMSF. Are there any particular advantages to this (new) approach versus simply investing directly into an ETF for example?
Answer: Yes, it is an interesting offer. The two main advantages are that you get access to professional managers and potentially asset classes that can be difficult to access (for example, infrastructure), and secondly, it stacks on some options in regard to pricing. Fees are:
- A one-off joining fee $240;
- An annual admin charge of $165 pa.
- Management fees, from as low as 0.02% pa for the ‘indexed balanced’ option to 0.71% pa for the ‘balanced option’ (the former is attractive, the latter isn’t);
- Indirect costs that you don’t directly see, ranging from 0.05% pa for ‘indexed balanced’ to 0.35% for ‘balanced’ and 0.39% pa for ‘property’.
If you are an index, passive style investor, it is about line ball with investing directly in the major ETFs (although it might be considerably more difficult to create a “balanced” portfolio using ETFs).