Vanguard launches Australian pension fund

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Vanguard launched a new pension fund, Vanguard Super, in Australia on Nov. 11, less than three months after the investment manager secured the country’s first new fund license in six years.

The pension fund is debuting Vanguard Super SaveSmart, an accumulation product that includes a default fund called Lifecycle, as well as a range of diversified and indexed sector options.

Vanguard hopes to attract savers by offering lower fees than other Australian pension funds. The company cited analysis it commissioned from accountancy firm Deloitte that found the Vanguard Super default option’s 0.58% annual fee to be the lowest in the Australian pensions market for participants with lower balances. at AU$50,000 ($33,593) and for members aged 47 and under.

“There remains a lot of variety in how pension contributions are constructed and communicated to members – making it difficult to really understand how much they pay each year,” Vanguard Australia chief executive Daniel Shrimski said in a statement. . “Vanguard Super’s fees are deliberately structured to be transparent and competitive.”

He added that the fund’s charges are shown on an annual basis and include investment cost, administration fees and transaction costs, but exclude activity fees and insurance premiums.

According to Vanguard’s statement, the pension fund’s default fund adjusts 36 times over a member’s lifetime at no cost, compared to four or five adjustments for the average lifecycle fund. The company said this is intended to provide age-appropriate asset allocation adjustments to participants and automatically reduce risk in their portfolios before and during retirement.

Lifecycle members aged 47 and under default to a diversified portfolio with a higher allocation to growth assets, after which Lifecycle investing undergoes a series of annual changes that prioritize defensive assets over growth assets. growth. From age 82, asset allocation has a greater emphasis on risk reduction to protect retirement savings from potential volatility.

Shrimski also said that Vanguard Super “will soon add a competitive retirement offering and digital access for advisors.”

Vanguard Great Investment Options

Annual fee* %

A$ annual fee (member with A$50,000 balance)

A$ annual fee (member with a balance of A$250,000)

Diversified

Cycle of life

0.58%

$290

$1,450

Conservative

0.56%

$280

AU$1,400

Balance

0.56%

$290

AU$1,400

Growth

0.56%

$280

AU$1,400

Ethically Conscious Growth

0.58%

$290

$1,450

High increase

0.56%

$280

AU$1,400

Single Sector

International Equities

0.58%

$290

$1,450

Australian stocks

0.58%

$290

$1,450

International Equities (hedged)

0.58%

$290

$1,450

Australian fixed interest

0.58%

$290

$1,450

Global fixed interest (hedged)

0.58%

$290

$1,450

Cash

0.39%

$195

$975

*The annual fee figure includes fund investment costs, administration costs and transaction costs and excludes activity costs and insurance premiums
Source: Vanguard

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Tags: Australia, Daniel Shrimski, Deloitte, Pension Fund, Super Fund, Vanguard

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