Super fund provides an active option

Mercer SmartPath, a superannuation and pension fund, has a new direct-investment option giving members access to all the shares in the S&P/ASX 300, term deposits from four providers and 62 exchange traded funds (ETFs).

These direct investments, which are often popular with self-managed superannuation funds, are in addition to Mercer's existing 45 managed funds, which include an impressive number of premixed, actively managed, diversified funds, single-sector funds and index funds.

Members can be active investors with the direct-investment option or leave the decisions to the experts by opting for a diversified default option.

Mercer SmartPath is a life-cycle super and pension product which automatically adjusts the exposure to higher-risk growth assets to a more defensive investment portfolio as an investor ages.

The investment decisions are undertaken by Mercer's asset consultants, who make investment choices for large super funds.

Currently, when you move from the accumulation fund to an account-based pension using a member-direct option, you trigger capital gains tax. Mercer SmartPath is working make the transition seamless without triggering a CGT, says Ben Walsh, head of financial services at Mercer.

Walsh says the Mercer Super Trust is the first retail corporate master trust to deliver direct investment. The trust has been around for 15 years and has 226,200 members with $18.5 billion in assets.

MONEY VERDICT

This is ideal for anyone who wants to take control of their superannuation. The 62 ETFs are a real plus. ETFs are low cost, diversified and typically liquid investments that can be bought and sold on the ASX.

While you can keep your investment management fees low with ETFs, there are other costs charged by the member-direct option, such as a $195pa member fee, a $78pa administration fee plus an asset-based fee of 0.1%. The investment management fees are reasonable and range from 0.33%pa to 0.47%pa.

Get stories like this in our newsletters.