AustralianSuper hikes investment fees
AustralianSuper has raised the fees of most investment options on account of its recent investments in several large infrastructure and property assets.
The fund's balanced option, in which more than 90% of its members are invested, saw its fees raised by 0.1%.
Moreover, eight of AustralianSuper's investment options fees climbed higher. However, fees on the international shares option fell (0.44% to 0.4%), and fees on cash remain unchanged (0.06%).
"To grow members' retirement savings over the longer term, the fund invests across a range of asset classes. This helps cushion the impact of downturns while ensuring members benefit from exposure to growth assets such as equities and unlisted assets," an AustralianSuper spokesperson says.
"During the financial year ending June 30, 2022, we invested in several large infrastructure and property assets which incurred upfront costs such as stamp duty. These are assets we intend to hold for the long term but have contributed to higher investment fees for some of our investment options. AustralianSuper is a profit for member organisation."
AustralianSuper reported an annual return of -2.73% for its Balanced MySuper option - its first negative return since the Global Financial Crisis.
Meanwhile, according to Rainmaker Information data, AustralianSuper's bump in investment fees on its MySuper option takes its overall fee ratio to 1.00%, or $502 per year for a member with $50,000 - up from the previous $452. This is still lower than the 1.08% average for MySuper that was recorded in the research house's 2021 review of super fund fees.
When directly compared to the MySuper options of similar large funds, Australian Retirement Trust's QSuper product has MySuper fees of 0.85%, or $425 per annum on a $50,000 balance. UniSuper also has much lower fees of 0.64%, or $321 per year.
However, Australian Retirement Trust's Super Savings product has higher Mysuper fees of 1.11% ($557.4 pa). Also, Aware Super has fees of 1.34% ($672 pa).
Elsewhere, some retail funds are drastically slashing fees. For example, AMP's signature product has just cut its MySuper fees to 0.71%.
Rainmaker executive director of research Alex Dunnin says: "This idea that industry funds offer the lowest fees is an idea that has pretty much passed its use-by date. While some industry funds are cheaper, as a group, they've lost their low-fee edge.
"It's retail funds that are now leading the fight to lower superannuation fees. Industry funds instead appear to be focusing on their returns after fees."
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