quercus

My 18yo daughter has just started work in a child care centre and has brought home a prospectus for the Australian Childcare Superfund. I don't know a thing about them, but it seems like a 1.3% performance for last year in the secure portfolio 100% cash fund is a pretty poor result. On top of that she would have to pay membership fees.

Can anyone recommend a suitable fund or a comparison website that compares rather than tries to sell you something? I did find a website that told me the industry medion for a cash fund is 5.11, but I couldn't find a comparison list.

Any comments anyone?

Q

jad n rich

Many super funds lost 25% or more of their members balance plus fees of course.

a 1.3% plus in the current market is actually brilliant ( super = your pension + its invested mainly in shares )

But you said that was cash, will only be 2/3% though and if the share market turns you miss the potential upswing.

There are comparisom sites but its all past history, dont think anyone has a clue where the markets will go this year. ( although no doubt on this fourm someone will soon tell us )

ozhappy981

A good start is the "Fido" website run by the Australian Securities and Investment Commission (ASIC):
http://www.fido.gov.au/fido/fido.nsf...superannuation

Use the l.h. navigator and read your way through "Choosing a Fund" and "Comparing funds".

Under the "Comparing Funds" link are pages on what different investment strategies mean and further down a link to a table of 5 and 10 year average performance figures for different investment strategies.

Under "Choosing a Fund" is a worksheet to compare funds. You may want to copy that into a Word document and use later (see below).

Next you might want to check out Industry Super Funds. They have low fees and pay no commission.

http://www.industrysuper.com/choose-...choose-a-fund/
This page has links to all 17 Industry Super Funds. Some are only open for people working in certain industries. Others are open to all.

You could make a shortlist of the funds amongst these 17 that your daughter could join. Then use the comparison worksheet from the "Fido" website to help you decide which is the best one for your daughter.

Choosing a super fund is a lengthy process: you'll need a dose of patience and a couple of rainy weekends . But doing all the above research will pay dividends in the long run. (Yes, you can change super funds, but you always lose some money in the process. Best to do thorough research first.)

asprilla

1.3% in a secure cash portfolio is a terrible return... Anyone could have done better simply by sticking their money in the bank.

If you don't know what you are talking about then don't provide advice to people on a public forum.

I nearly used the frown emoticon there, but I restrained myself.

quercus

Thanks for the comments guys!

Ozhappy gets the big bouquet for a most useful and thoughtful reply. Many thanks!

jad n rich

I said COMPARED to many funds that lost 25% or more last year, dont just take one line of my post, which makes it read something else ( nearly used a anger symbol there but restrained myself ) It was a chronic year for super funds and my point was anyone whos super didnt make a HUGE loss did pretty well to still have their funds with a + sign.

Even in good years a cash fund often only returns 4/5% despite higher rates with the bank, besides you cant say stick it in the bank with super, what sort of advice is that your employers super money has to go into a a fund, they are also totally different tax vehicles.

My point about past performace being little indication is also a very valid point, many people chase past returns and they are just that, gone, over and out, last years great performer is often next years dud.

Hullfcfans

There is more to life than just low fees and no commission. The long run ads criticising commissions show only half the picture. There is a great fear in the financial advice industry that the performance of industry super funds is held up by the high price of unlisted investments held by industry funds.

In many cases, these investments have last been valued 2 or 3 years ago. What do you think might happen when they are revalued? That's right! The industry fund unit prices will fall.

There are a good many things that can come out of receiving financial advice that outweigh the costs of paying for it. This is a topic that could easily get derailed by such a debate though.

ABCDiamond

Looking at:
http://www.selectingsuper.com.au/mis..._SSPT_Cash.pdf

The minimum return for the 12 months to March 2009 appears to be 1.7%, from a selection of 111 Secure Cash Funds.

8.2% was the best rate, and the median was 5.2%, all for the 12 month period.

These figures reflect net investment performance, i.e. net of investment tax, net of investment management fees and net of the maximum applicable ongoing management fees

harrip

I found the Apple Check report from here - http://www.australiansuper.com/tools....aspx?intcmp=6 very useful.

quercus

The childcare superfund wasn't included in that survey for some reason. Maybe they bribed someone to be kept off it! That chart certainly confirms my opinion about the fund. My daughter didn't have a clue and was just going to sign up for it believing it was in her best interests. It annoys me that these youngsters get no guidance about such a potentially life changing decision. Nowhere on the prospectus does it mention performance, you have to go to the web site for that. What were they studying in maths at school? They should be prepared for life and financial realities much better than they are.

OK rant over.

Thanks for finding the chart. I'm going to set some time aside over the next few days for some research.

quercus

Thanks for those comments.

If many of the funds are much lower even than they appear to have fallen then I feel very sorry for those approaching retirement. It confirms my opinion that cash is safest until the dust settles. I hope it's not too complicated to change to a different scheme/portfolio or whatever they call it, within the same company I mean. I will certainly take the higher risk options into account when comparing companies so she can transfer at some time in the future.

As for financial advisers, I'm sure that most of them have integrity. Unfortunately I have lost out due to one that didn't, during a remortgage of our first house. I have used one since, but I like to do my own research. Once bitten...you don't forget! Q

asprilla

yep, sorry mate - I think I was in a bad mood at work when I wrote that....I didn't read your post properly.

no offence meant.