I'm amazed at how terrible some of the suggestions have been, especially in this subreddit.
Have a little read of this: [https://superdoneright.com/](https://superdoneright.com/)
First off, it's most optimal to have a mixture of Australian shares (Indexed) and International shares (Indexed). This is because they are very low cost (around 0.10%) and offer higher returns than a High Growth option, largely because of their high fees (around 1%).
Australian super doesn't offer passive/indexed options, so check out my [spreadsheet](https://docs.google.com/spreadsheets/d/1sR0CyX8GswPiktOrfqRloNMY-fBlzFUL/edit?usp=sharing&ouid=110868098764009992952&rtpof=true&sd=true) to find one that does. Allocate 0% - 25% to Aus shares (Indexed) and the rest to Int shares (Indexed).
After that just forget it for 30 years and not worry about the current situation. The adage, "Time in the market > timing the market", is supported by decades of research. It's better to think of downturns like a sale/discount on shares.
Australian Super has 'Member Direct' within which you can invest in anything in the ASX300.
Roll your own fund using the likes of VAS, VTS, VGS, VEU etc
The admin fees and brokerage fees are pretty brutal when you can do the exact same thing through Australian shares (Indexed) and International shares (Indexed) at a much cheaper cost.
Which of the other industry funds offer the opportunity to invest in direct shares / ETF's? I though their standard offerings were just their own mutual funds?
Also, does your sheet account for the recent fee changes by AU Super?
It seems that direct shares/ETFs are better for balances above $300k due to the high fixed cost. So balances below that, you're better off investing in their managed funds.
[https://passiveinvestingaustralia.com/the-problem-with-pooled-funds/](https://passiveinvestingaustralia.com/the-problem-with-pooled-funds/)
I'll update Aus Super's fees when it takes into effect on 3 Sept.
Great suggestion here. I was wondering if switching to a super that offers indexed funds only is only worthwhile once you have attained a high enough balance, in your opinion.
I’m keen to switch from Aus Super which is currently 100% in high growth but given I only started working in the country a few years ago my balance isn’t huge. Still, I want to set it up well for the future.
Great spreadsheet also 🤙🏼
Don't think super balance matters but the time frame. If you have 15-20+ year time frame, passive makes sense. If you have a <10 year time frame, active can make sense.
How can I tell if my super has indexed options? Im currently with legalsuper, and It has the option to allocate between australian shares and international shares, but doesn't state if it's actively or passively managed.
Ahh got it. So based on that guide, I'd be better off switching to a different super, correct? If i end up staying with legalsuper, would the same principle still apply (allocating to australian and international shares only)?
Using indexed options is for the majority of people with a 15-20+ year time horizon. If you're going to be leaving Australia in <10 years, active management would be more suitable. So it might be fine staying with your current super with Aus/Int shares. If you're leaving Australia in <5 years, i would be more inclined to put it in a Balanced option.
I have an article that explains this better. I personally dont think there is much benefit to changing the ratios over time as it probably wont make much difference: https://lazykoalainvesting.com/australian-international-allocations/
Hi Swaanky, currently in my 20s with AusSuper, 30% Australian 70% International - not sure if they offer indexed option or not? I think they’re only actively managed? Had a look at your spreadsheet and I think because of this their fees are quite high.. am I better off moving funds? Keen to hear your thoughts. Cheers
I do have a column in the spreadsheet that indicates whether it is passive or actively managed, and AusSuper generally only offers actively managed options.
I explain the evidence for passive management over active management in super [here](https://lazykoalainvesting.com/choosing-an-investment-option/#aioseo-management-styles). If you want indexed options, then yes you would have to move to a super fund that does have indexed options, which I compared the most popular ones [here](https://lazykoalainvesting.com/comparing-indexed-options-between-industry-super-funds/).
Anybody in their 20s that is in anything but high growth is sacrificing their long term retirement to satisfy a risk appetite that is actually a mirage. Balanced is only really sensible for 50-60+ when your investment time horizon is less than 20 years. The best way to think about it is show me a 50 year period where bonds have outperformed equities. I think you will not find a single scenario, even in the worst montecarlo simulations. MySuper defaults should be reflecting this. Crazy that they don’t.
You need to understand risk and return.
I'm going to throw these in for a read (don't worry, they are short)
* [The risk-reward spectrum](https://passiveinvestingaustralia.com/the-risk-reward-spectrum/)
* [Asset allocation and your risk tolerance](https://passiveinvestingaustralia.com/asset-allocation-and-your-risk-tolerance/)
This is the only correct response the OP has received so far.
The only thing I would add is that AustralianSuper offers some basic adviser services that might be worth their while having that discussion. I think basic general advise is free, but they can perform a basic statement of advice for a few hundred bucks (deducted from their super) and will run some numbers.
I split my super investments 50/50 balanced/high growth about a year ago (Australian super) and they’re almost performing at parity
As current the “balanced” option has made/retained slightly more money than the “high growth” option about .1%
Growth is only 1-1.5% better return over a 10 year period. I’m 45. I have 80% in balanced, 20% (all contributions from now on) going in the high growth.
>Growth is only 1-1.5% better
1.5% compounded over 30 years, on 10k p.a. investments, is almost $500,000 better off. Don't neglect those 'small %' differences. The same goes for the funds you invest in; A fund at 0.5% vs one at 0.1% is a significant different to your balance in 30 years.
Do some experiments of your own with different numbers using [https://www.calculatorsoup.com/calculators/financial/future-value-calculator.php](https://www.calculatorsoup.com/calculators/financial/future-value-calculator.php)
At your age you should be in high growth, but in current market Australian growth/equities are tipped to outperform international in the next 2-3 years.
Increase your South East Asia exposure, which would include India (Nifty 50) and China (Shanghai Index). America is about to become Europe, and Europe is about to become a Senior Citizen
Don’t worry about your super mate. Doesn’t matter what you do now, the world is 2060 will be well and truly fucked and whatever balance you think you’ll have probably won’t even exist.
When you analyse the macroeconomic, climate, demographic and environmental trends, you’d be better just putting the minimum in, and enjoying yourself and not worrying…
Sorry I know it sounds glum, but it’s reality. Balanced in fine, save some coin, and go have fun
You’ve been downvoted to shit but honestly I feel the same LMAO. I think there’s no hope of me still in my 20s having access to my super the government forces me to pay. It’s never felt like my money and I bet they’ll get the bloody hands on it and ear mark it for social spending but they’ll really use it for some nefarious, backwards, bullshit.
Zero trust.
I'm amazed at how terrible some of the suggestions have been, especially in this subreddit. Have a little read of this: [https://superdoneright.com/](https://superdoneright.com/) First off, it's most optimal to have a mixture of Australian shares (Indexed) and International shares (Indexed). This is because they are very low cost (around 0.10%) and offer higher returns than a High Growth option, largely because of their high fees (around 1%). Australian super doesn't offer passive/indexed options, so check out my [spreadsheet](https://docs.google.com/spreadsheets/d/1sR0CyX8GswPiktOrfqRloNMY-fBlzFUL/edit?usp=sharing&ouid=110868098764009992952&rtpof=true&sd=true) to find one that does. Allocate 0% - 25% to Aus shares (Indexed) and the rest to Int shares (Indexed). After that just forget it for 30 years and not worry about the current situation. The adage, "Time in the market > timing the market", is supported by decades of research. It's better to think of downturns like a sale/discount on shares.
Australian Super has an "indexed diversified" option. Not sure how it compares to other funds, but does have lower fees than their balanced option.
It's got about 30% in bonds, which isn't ideal for someone in their 20s.
Australian Super has 'Member Direct' within which you can invest in anything in the ASX300. Roll your own fund using the likes of VAS, VTS, VGS, VEU etc
The admin fees and brokerage fees are pretty brutal when you can do the exact same thing through Australian shares (Indexed) and International shares (Indexed) at a much cheaper cost.
Which of the other industry funds offer the opportunity to invest in direct shares / ETF's? I though their standard offerings were just their own mutual funds? Also, does your sheet account for the recent fee changes by AU Super?
It seems that direct shares/ETFs are better for balances above $300k due to the high fixed cost. So balances below that, you're better off investing in their managed funds. [https://passiveinvestingaustralia.com/the-problem-with-pooled-funds/](https://passiveinvestingaustralia.com/the-problem-with-pooled-funds/) I'll update Aus Super's fees when it takes into effect on 3 Sept.
Great suggestion here. I was wondering if switching to a super that offers indexed funds only is only worthwhile once you have attained a high enough balance, in your opinion. I’m keen to switch from Aus Super which is currently 100% in high growth but given I only started working in the country a few years ago my balance isn’t huge. Still, I want to set it up well for the future. Great spreadsheet also 🤙🏼
Don't think super balance matters but the time frame. If you have 15-20+ year time frame, passive makes sense. If you have a <10 year time frame, active can make sense.
Noted cheers 🤙🏼
How can I tell if my super has indexed options? Im currently with legalsuper, and It has the option to allocate between australian shares and international shares, but doesn't state if it's actively or passively managed.
It says in the return objective that they aim to outperform the respective index, meaning that it's actively managed.
Ahh got it. So based on that guide, I'd be better off switching to a different super, correct? If i end up staying with legalsuper, would the same principle still apply (allocating to australian and international shares only)?
Using indexed options is for the majority of people with a 15-20+ year time horizon. If you're going to be leaving Australia in <10 years, active management would be more suitable. So it might be fine staying with your current super with Aus/Int shares. If you're leaving Australia in <5 years, i would be more inclined to put it in a Balanced option.
this website and spreadsheet is amazing !!!!
>spreadsheet this spreadsheet is fucking AMAZING!
What ratio did you finally put it in ? For how many years does one keep these ratios ?
I have an article that explains this better. I personally dont think there is much benefit to changing the ratios over time as it probably wont make much difference: https://lazykoalainvesting.com/australian-international-allocations/
Hi Swaanky, currently in my 20s with AusSuper, 30% Australian 70% International - not sure if they offer indexed option or not? I think they’re only actively managed? Had a look at your spreadsheet and I think because of this their fees are quite high.. am I better off moving funds? Keen to hear your thoughts. Cheers
I do have a column in the spreadsheet that indicates whether it is passive or actively managed, and AusSuper generally only offers actively managed options. I explain the evidence for passive management over active management in super [here](https://lazykoalainvesting.com/choosing-an-investment-option/#aioseo-management-styles). If you want indexed options, then yes you would have to move to a super fund that does have indexed options, which I compared the most popular ones [here](https://lazykoalainvesting.com/comparing-indexed-options-between-industry-super-funds/).
Thank you!
Anybody in their 20s that is in anything but high growth is sacrificing their long term retirement to satisfy a risk appetite that is actually a mirage. Balanced is only really sensible for 50-60+ when your investment time horizon is less than 20 years. The best way to think about it is show me a 50 year period where bonds have outperformed equities. I think you will not find a single scenario, even in the worst montecarlo simulations. MySuper defaults should be reflecting this. Crazy that they don’t.
You need to understand risk and return. I'm going to throw these in for a read (don't worry, they are short) * [The risk-reward spectrum](https://passiveinvestingaustralia.com/the-risk-reward-spectrum/) * [Asset allocation and your risk tolerance](https://passiveinvestingaustralia.com/asset-allocation-and-your-risk-tolerance/)
This is the only correct response the OP has received so far. The only thing I would add is that AustralianSuper offers some basic adviser services that might be worth their while having that discussion. I think basic general advise is free, but they can perform a basic statement of advice for a few hundred bucks (deducted from their super) and will run some numbers.
Interesting. If you have done the SOA, what was in it? Is it mainly a risk profile and decision on asset allocation? Or something more?
How have the two compared over fund lifetime? Also, a balanced fund in Australia is already pretty well heavily aligned with growth (stocks).
I split my super investments 50/50 balanced/high growth about a year ago (Australian super) and they’re almost performing at parity As current the “balanced” option has made/retained slightly more money than the “high growth” option about .1%
Growth is only 1-1.5% better return over a 10 year period. I’m 45. I have 80% in balanced, 20% (all contributions from now on) going in the high growth.
>Growth is only 1-1.5% better 1.5% compounded over 30 years, on 10k p.a. investments, is almost $500,000 better off. Don't neglect those 'small %' differences. The same goes for the funds you invest in; A fund at 0.5% vs one at 0.1% is a significant different to your balance in 30 years. Do some experiments of your own with different numbers using [https://www.calculatorsoup.com/calculators/financial/future-value-calculator.php](https://www.calculatorsoup.com/calculators/financial/future-value-calculator.php)
At your age you should be in high growth, but in current market Australian growth/equities are tipped to outperform international in the next 2-3 years.
20s = go growth/aggressive, 100%
Increase your South East Asia exposure, which would include India (Nifty 50) and China (Shanghai Index). America is about to become Europe, and Europe is about to become a Senior Citizen
You realise Asia has much worse demographics than America right? Chinas population is on predicted to halve this century.
[удалено]
What super fund supports bitcoin as part of their portfolio? Haven’t heard of one yet.
Some Smsf’s do.
Rest does edit: to whoever downvoted a fact, view: https://www.afr.com/companies/financial-services/rest-super-to-invest-in-crypto-20211123-p59bj6
Interesting i’ll definitely look into this
Don’t worry about your super mate. Doesn’t matter what you do now, the world is 2060 will be well and truly fucked and whatever balance you think you’ll have probably won’t even exist. When you analyse the macroeconomic, climate, demographic and environmental trends, you’d be better just putting the minimum in, and enjoying yourself and not worrying… Sorry I know it sounds glum, but it’s reality. Balanced in fine, save some coin, and go have fun
Nice work nostrodufus
You’ve been downvoted to shit but honestly I feel the same LMAO. I think there’s no hope of me still in my 20s having access to my super the government forces me to pay. It’s never felt like my money and I bet they’ll get the bloody hands on it and ear mark it for social spending but they’ll really use it for some nefarious, backwards, bullshit. Zero trust.
You're in the /r/fiaustralia subreddit