Are industry Super funds better than the Retail funds?

[Panaman]

I had good look at my wife’s super as she is with one of the industry funds that advertise very low fees, now on the surface it looks good, there is a $5 monthly admin fee, and annual asset based admin fee of 0.15% a year, then an investment management fee of between 0.05% up to 0.75% depending on were your invested, then there are performance fees, even so if you add it up it still sounds not too bad, maybe only 1% at most if the performance fees are triggered.

BUT, what they don’t tell you until you read the small print is that they DON’T invest your money !, there just administrators and outsource the investing bit to the likes of AMP, BT, Colonial, Vanguard etc, now iam sure there fees will be lower for such big sums being invested with them but there will be fees, performance fees and admin fees all the same, and all of which the outsourcing fund doesn’t seem to have to disclose they can just say the fees that they levy on your fund or have I missed something here ?

 

[ROE]

Re: Are industry Superfund’s better than the Retail funds

The Gravy has always been admin and performance fees, it work out for a lot of
People the money they get when retire is all the money they put

In and not from investment return... Fees fees and all sort of little hand
Get a dipped in them.

When it come to
Money if you can control It yourself no one act
in its interest better than you -

 

[So_Cynical]

I had good look at my wife’s super as she is with one of the industry funds that advertise very low fees, now on the surface it looks good, there is a $5 monthly admin fee, and annual asset based admin fee of 0.15% a year, then an investment management fee of between 0.05% up to 0.75% depending on were your invested, then there are performance fees, even so if you add it up it still sounds not too bad, maybe only 1% at most if the performance fees are triggered.

BUT, what they don’t tell you until you read the small print is that they DON’T invest your money !, there just administrators and outsource the investing bit to the likes of AMP, BT, Colonial, Vanguard etc, now iam sure there fees will be lower for such big sums being invested with them but there will be fees, performance fees and admin fees all the same, and all of which the outsourcing fund doesn’t seem to have to disclose they can just say the fees that they levy on your fund or have I missed something here ?

Fees and costs are an important part of super decisions but return and performance is so much more important, i think that some people place too much importance on fees and costs...i think its strange how the industry funds seem to focus all their advertising around fees and the general public never gets to hear about the investment choices available.

 

[ROE]

I think this lecture by Warren Buffet sometimes ago in his annual report sit pretty well with our Super fund
They are pretty much the market control the majority of the money...

if you are new read every single one of Warren Buffett Annual Report to his shareholders, each year he has an article ditch out his wisdoms and if you read carefully, it is the best advice any investor could ever had, paid advice may not comes as good as his

He tell you about the dot com, the gold bull and every thing else in between and time and time again
history proved him right...

Very simple yet extremely good practical advices and here it is again the Gotrocks family

Imagine for a moment that all American corporations are, and always will be, owned by a single family. We'll call them the Gotrocks. After paying taxes on dividends, this family -- generation after generation -- becomes richer by the aggregate amount earned by its companies.

Today that amount is about $700 billion annually. Naturally, the family spends some of these dollars. But the portion it saves steadily compounds for its benefit. In the Gotrocks household everyone grows wealthier at the same pace, and all is harmonious.

But let's now assume that a few fast-talking Helpers approach the family and persuade each of its members to try to outsmart his relatives by buying certain of their holdings and selling them certain others. The Helpers -- for a fee, of course -- obligingly agree to handle these transactions. The Gotrocks still own all of corporate America; the trades just rearrange who owns what.

So the family's annual gain in wealth diminishes, equaling the earnings of American business minus commissions paid. The more that family members trade, the smaller their share of the pie and the larger the slice received by the Helpers. This fact is not lost upon these broker-Helpers: Activity is their friend, and in a wide variety of ways, they urge it on.

After a while, most of the family members realize that they are not doing so well at this new "beat my brother" game. Enter another set of Helpers. These newcomers explain to each member of the Gotrocks clan that by himself he'll never outsmart the rest of the family. The suggested cure: "Hire a manager -- yes, us -- and get the job done professionally."

These manager-Helpers continue to use the broker-Helpers to execute trades; the managers may even increase their activity so as to permit the brokers to prosper still more. Overall, a bigger slice of the pie now goes to the two classes of Helpers.

The family's disappointment grows. Each of its members is now employing professionals. Yet overall, the group's finances have taken a turn for the worse. The solution? More help, of course.

It arrives in the form of financial planners and institutional consultants, who weigh in to advise the Gotrocks on selecting manager-Helpers. The befuddled family welcomes this assistance. By now its members know they can pick neither the right stocks nor the right stock pickers. Why, one might ask, should they expect success in picking the right consultant? But this question does not occur to the Gotrocks, and the consultant-Helpers certainly don't suggest it to them.

The Gotrocks, now supporting three classes of expensive Helpers, find that their results get worse, and they sink into despair. But just as hope seems lost, a fourth group -- we'll call them the hyper-Helpers -- appears. These friendly folk explain to the Gotrocks that their unsatisfactory results are occurring because the existing Helpers -- brokers, managers, consultants -- are not sufficiently motivated and are simply going through the motions. "What," the new Helpers ask, "can you expect from such a bunch of zombies?"

The new arrivals offer a breathtakingly simple solution: Pay more money. Brimming with self-confidence, the hyper-Helpers assert that huge contingent payments -- in addition to stiff fixed fees -- are what each family member must fork over in order to really outmaneuver his relatives.

The more observant members of the family see that some of the hyper-Helpers are really just manager Helpers wearing new uniforms, bearing sewn-on sexy names like HEDGE FUND or PRIVATE EQUITY. The new Helpers, however, assure the Gotrocks that this change of clothing is all-important, bestowing on its wearers magical powers similar to those acquired by mild-mannered Clark Kent when he changed into his Superman costume. Calmed by this explanation, the family decides to pay up.

And that's where we are today: A record portion of the earnings that would go in their entirety to owners -- if they all just stayed in their rocking chairs -- is now going to a swelling army of Helpers. Particularly expensive is the recent pandemic of profit arrangements under which Helpers receive large portions of the winnings when they are smart or lucky, and leave family members with all the losses -- and large fixed fees to boot -- when the Helpers are dumb or unlucky (or occasionally crooked).

A sufficient number of arrangements like this -- heads, the Helper takes much of the winnings; tails, the Gotrocks lose and pay dearly for the privilege of doing so -- may make it more accurate to call the family the Hadrocks. Today, in fact, the family's frictional costs of all sorts may well amount to 20 percent of the earnings of American business. In other words, the burden of paying Helpers may cause American equity investors, overall, to earn only 80 percent or so of what they would earn if they just sat still and listened to no one.

Long ago, Sir Isaac Newton gave us three laws of motion, which were the work of genius. But Sir Isaac's talents didn't extend to investing: He lost a bundle in the South Sea Bubble, explaining later, "I can calculate the movement of the stars, but not the madness of men." If he had not been traumatized by this loss, Sir Isaac might well have gone on to discover the fourth law of motion: For investors as a whole, returns decrease as motion increases.

 

[burglar]

... earn only 80 percent or so of what they would earn if they just sat still and listened to no one ...

Nice lecture ...
But where do you go, to get 100% of the return?

 

[ROE]

Nice lecture ...
But where do you go, to get 100% of the return?

100% as in the pie of return if you got no other cost

say stock A pay you $10 return well thats 100%
but what if other friction comes in between and it end up paying you 80% of it hence $8 bucks instead of $10
$2 goes to fees, admin, performance what ever else

 

[The Barbarian Investor]

Re: Are industry Superfund’s better than the Retail funds

The Gravy has always been admin and performance fees, it work out for a lot of
People the money they get when retire is all the money they put

In and not from investment return... Fees fees and all sort of little hand
Get a dipped in them.

When it come to
Money if you can control It yourself no one act
in its interest better than you -

It's the meat, potatoes and gravy