• Australian (ASX) Stock Market Forum

Benefits of ETF in SMSF as opposed to Superannuation fund

Discussion in 'Medium/Long Term Investing' started by goponcho, Sep 21, 2016.

  1. goponcho

    goponcho Well-Known Member

    Posts:
    70
    Likes Received:
    0
    Joined:
    Jan 20, 2010
    Hi,

    Currently have our superannuation in one the big firms.

    I have read a little about how the SMSF fund is set up and functions.
    Rather than paying x% fees with super fund, how does this compare to the costs/effort of running a SMSF with just a couple of ETF's?

    Looking at buying and holding a representative portfolio and letting it compound.

    Will only get taxed 15% on income, and nothing on capital gains until i sell?
     
  2. mjim

    mjim Well-Known Member

    Posts:
    87
    Likes Received:
    1
    Joined:
    Jun 6, 2016
    So when you say Superannuation fund you mean "industry super" and you are now thinking about setting up an SMSF ( both are super funds hence this clarification)

    It depends upon few factors
    - Size of SMSF you wish to establish and it's ratio to the fixed fees of establishing it and compare those with the fees you are currently paying and do you think you can do better than the professionals?
    - What you want to do with the SMSF funds? only shares/ ETF etc or Property also?
    - The tax is same if it is industry super or SMSF
    - If you do establish a SMSF for shares / etf trading, just make sure your Trustee Deed covers all sort of investment possibilities
     
  3. goponcho

    goponcho Well-Known Member

    Posts:
    70
    Likes Received:
    0
    Joined:
    Jan 20, 2010
    Thanks for the reply, that is what i meant, comparing it to an industry superfund.

    I want to leave my money in ETF's to try and reduce the costs associated with management.
    Am only 30 years, and will be managing my wife's money too, so the amount should materially grow and i am guessing the fixed setup costs will be exceeded by the savings on management fees.
     
  4. Bill M

    Bill M Self Funded Retiree

    Posts:
    1,708
    Likes Received:
    13
    Joined:
    Jan 4, 2008
    Hi goponcho, I am not trying to push a particular product but I have my super with ING Living Super.

    With them you can buy and sell ASX top 300 stocks, LIC's and ETF's and the costs may be well lower than running a SMSF. For something like you said "leave my money in ETF's to try and reduce the costs associated with management" this ING account might well suit you.

    I pay: $25 per Month to have the above facility + I then pay between .2% and .35% depending on the ETF, + brokerage for buys and sells.

    Now lets use an example. If you have say 200K in ETF's then this will cost you, $25 x 12 = $300 + say .25% average MER = $500, + say 10 trades a year @ $20 per trade or .13% = $200 (minimum) = $1,000 per year

    They do all tax reporting and auditing. All you do is allocate your funds. There are some rules and regulations as to what you can do so please read the PDS first.

    Website here:https://www.ingdirect.com.au/superannuation/living-super.html

    Share Trading and ETF list here: https://www.ingdirect.com.au/superannuation/tips-hints-guides/shares-etfs-lics.html

    Good luck.
     
  5. mjim

    mjim Well-Known Member

    Posts:
    87
    Likes Received:
    1
    Joined:
    Jun 6, 2016
    I was going to suggest similar, meaning there might be some industry super which allows such "Internal freedom" to choose !
     
    Iggy_Pop likes this.
  6. goponcho

    goponcho Well-Known Member

    Posts:
    70
    Likes Received:
    0
    Joined:
    Jan 20, 2010
    Thanks for the suggestions
    Will have a bit of a read, of which i havent done enough about this :)
     
  7. pixel

    pixel Well-Known Member

    Posts:
    4,269
    Likes Received:
    12
    Joined:
    Feb 3, 2010
    First thing you should know about ETFs: How much do they siphon off via management fees?
    You may easily pay as much or more than if you left your money with a Superfund Manager.
    I was quite astounded when I came across this article:
    http://www.marketwatch.com/story/th...et-2016-11-01?siteid=bigcharts&dist=bigcharts
     
Loading...

Share This Page