Mirroring Superannuation Fund Investments outside of Super

ajwatts on 13/02/2018 - 12:55

Okay, folks - I have pretty much no idea how these things work, only the end results. Feel free to speak to me like I'm slow!

tl;dr - I'm very happy with the investment returns through my super (5% every 6 months). I would like to have exactly that with my non-super money. Can I easily just mirror exactly what is happening with my super?

When I started working, I accepted my employer's default super fund. I was a teenager and didn't think/care much about it. Many years later, when I switched jobs, I was going to stay with the same fund - but thought I'd consider my new employer's default. Turns out, it performed way better than the fund I initially fell into (talking only about the % investment returns) and my employer had worked out a very, very awesome deal for insurance, etc. through them. The latter was more important to me.

Even now, when I look up performance data for different funds, that fund tends to outperform the others on investment returns, and I can't find anyone that will come close to offering me the same insurance amounts, with the same generous terms and equally low fees. My employer did well!

Today, I received the latest statement from my fund - and (not including contributions paid in by my employer) my super had increased by 5% in 6 months. Seriously. Based purely on returns from investments. I don't know how good that is compared to other funds, and that isn't my question - let's accept that I'm happy with that and move on to my question:

IS THERE A WAY TO MIRROR WHAT MY SUPER FUND IS DOING, INVESTMENT-WISE, BUT WITH MY NON-SUPER MONEY?

I feel derpy approaching my fund with such a question, as I feel I should already know the answer. But in theory, if I approached my super fund, is it normal/common/likely that I could say "Here's some money, invest it in exactly the same way you do my super." and they'd say yes? I have a feeling there's something special about super that allows them to invest/manage it differently, but no basis for this at all.

Secondary question: even if they do this, would I be likely to be paying waaaaaay more in fees and commissions? If so, any suggestions on how to get around that?

This is totally alien territory to me, folks. All advice is appreciated.

Financial

Comments

  • retiredfeline on 13/02/2018 - 13:00
    +1

    Why not just make a non-concessional contribution to that super fund? Or can you not contribute any further? Check again, it may be that they will take former members again.

    • bobbified on 13/02/2018 - 13:03
      +2

      The cash that goes into the superannuation system won't be accessible unless a condition of release has been met.

      • retiredfeline on 13/02/2018 - 13:05

        Sure. that's the tradeoff.

        • bobbified on 13/02/2018 - 13:21

          The way the retirement age is going, I'm not sure I'd even live up to then to see my money again! haha

        • retiredfeline on 13/02/2018 - 13:26

          @bobbified: It depends on what stage of life OP is in. For those who are debt-free and within years of the preservation age (TRIS accounts used to be tax free but are taxed on earnings now, but may still be a good deal), sacrifice contribution to super is a massive boon to pump up one's savings, and lots of baby boomers have taken advantage of that, hence the discussion going on about the big tax breaks they are getting that way.

        • bobbified on 13/02/2018 - 13:32
          +1

          @greenpossum:

          From OP's post:

          I feel derpy approaching my fund

          Judging by his writing, I just made the assumption that OP is still relatively young. I, of course, could be wrong!

  • [Deactivated] on 13/02/2018 - 13:01
    +1

    Crypto

  • djkelly69 on 13/02/2018 - 13:13
    +3

    Are you aware that past returns are not a reliable indicator of future performance?

  • bobbified on 13/02/2018 - 13:19

    Your super fund has a Product Disclosure Statement that shows the different investment strategies available and who they're managed by. You could try contact the Fund Manager and ask them if they have an equivalent retail product. The difference will likely come from the fees because the super companies negotiate lower fees on a huge portfolio.

    Keep in mind that past performance is not an indicator of future performance. You might be happy at what you see as your current return, but have you compared the return to other funds? Your Risk Profile (ie, how comfortable you are with risk) will help determine how you can invest. There's a direct relation between risk vs return. Generally,the higher the risk you're willing to take, the higher the return.

    Also, the value in the "Investment Return/Earnings" field on your super statement isn't necessarily accurate of the actual return. The value in the field is usually a "balancing item" meaning that it's your current account value, less your "transactional values" over the period and any other fees.

  • idontalwaysnotlie on 13/02/2018 - 13:27

    Look at retail investment funds or ETF's such as vanguard. Their Diversified Balanced Index Fund is very similar to a usual super fund allocation, and delivers similar returns. if you have a longer time frame then look at their Diversified High Growth one.

  • tsunamisurfer on 13/02/2018 - 13:39

    OP.

    The short answer is yes you can mirror what your super is doing to an extent.

    The easiest thing to do is to call your financial adviser who signed you up to the super account and tell him you want to open an investment account (non-super) and buy into the exact same unit trusts that your super account has (same splits).

    The only thing you cannot mirror is taxation, super is taxed at 15%, any earnings from your investment account will be taxed at your marginal rate of tax.

    • CyberMurning on 13/02/2018 - 13:52
      +3

      Agree he can. But be careful it means when those stock selections are going down op money in both super and Non will be hammered at the same time and same rate.

      Diversity is important

  • KaTst3R on 13/02/2018 - 16:04

    Yes and No

    You can mirror the broad returns by investing in similar proportion as the asset class composition, eg, 20% bonds, 30% aus equities, 20% international equities, etc etc. This can be done through a financial planner with any of the banks or by purchasing ETFs to broadly mirror the returns. You can find out the asset class composition in the product disclosure statement or marketing materials.

    But it is unlikely to get exactly the same returns because super funds also invest in a lot of other vehicles like private equity, unlisted properties, infrastructure, absolute return strategies (hedge funds) which cannot be accessed by retail investors.

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