It’s interesting how we expect transparency in so many areas of life – like knowing exactly what’s in our food – but when it comes to superannuation, many people have little idea where their money is invested. This became clear to me when several super funds recently reported significant write-downs. In some cases, unlisted properties were marked down by as much as 20%, and private credit investments faced massive losses. Yet, most investors were left in the dark about these decisions.
Many super funds argue that withholding transparency helps them achieve better returns. They claim that if they disclosed their holdings and valuations every day, it would be harder to sell assets at the prices they want. But I’m not convinced. After all, listed companies report their share prices daily, and yet we still see takeovers at premiums of 20-50%. The value lies in the business itself, not in hiding information.
Transparency is key for investors
Australians deserve to know how their super is being managed. Superannuation isn’t a voluntary investment – it’s mandated by government. Super funds should openly share who their fund managers are and how they’re performing. This kind of transparency would bring much-needed accountability to both the fund managers and the super funds. Given that many super funds underperform their benchmarks, this accountability is long overdue.
If transparency were the norm, it’s likely that more super funds would turn to index funds and ETFs. Just like consumer demand for clarity in food labels led to the removal of artificial ingredients, transparency in super could drive better investment choices. Super funds should also disclose the specific assets they own and how they’re currently valued. Without regular updates, members buying or selling their super are often left guessing whether they’re getting a fair deal.
How Stockspot Super compares
Stockspot Super takes a different approach by prioritising transparency and low-cost investments. Our strategy revolves around using ETFs (Exchange Traded Funds), which offer daily pricing, complete visibility into holdings, and a clear picture of performance. We believe in keeping things simple and ensuring you know exactly where your money is going.
Stockspot Super’s investment approach rests on several key principles:
Transparency and simplicity:
Unlike many traditional super funds, which often make it difficult to understand where your money is invested, Stockspot Super invests exclusively in ETFs. This means you have full visibility of your portfolio, with daily valuations that reflect the real market. ETFs have earned their reputation for SMSFs because of their after-fee performance, tax efficiency, and transparency.
Proven investment track record:
At Stockspot, we use our expertise to select top-performing ETFs and build diversified portfolios tailored to your risk level. This focus on long-term growth and stability ensures that your super is working to meet your financial goals.
Lower costs:
Many super funds rely on large teams to pick stocks and manage active funds, driving up fees without necessarily improving returns. Stockspot Super keeps costs low by using passive investment strategies, which seek to maximise returns by minimising buying and selling. By focusing on low-cost ETFs, we reduce management fees and eliminate the hidden costs that can erode your retirement savings over time.
Investment advice:
Another key difference with Stockspot Super is our commitment to providing investment advice. Many super funds work with asset consultants who recommend active funds, often masking underperformance with clever presentations. Stockspot offers clear, evidence-based advice based on your age, ensuring you have all the information you need to make informed decisions about your investments.
Why gold matters:
One unique aspect of Stockspot Super’s portfolios is our inclusion of gold. Gold is an excellent diversifier because its value often rises when other asset classes, like shares, are underperforming. It also acts as a hedge against inflation and currency fluctuations – particularly important for the Australian economy, where a falling Australian dollar tends to be good for gold prices. Including gold in your portfolio can help stabilise returns during periods of market volatility, ensuring your investments remain resilient over time.
Why don’t more super funds use ETFs?
If ETFs offer such clear benefits, you might wonder why more super funds don’t use them. There are several reasons for this:
Asset consultants’ bias:
Asset consultants are often paid to recommend active funds. Even when these funds underperform, consultants are skilled at presenting results in a favourable light, which can lead super funds to stick with active strategies.
Investment teams’ resistance:
Many super funds employ large internal teams whose jobs depend on picking stocks and fund managers. There’s a belief that these teams can outperform the market, despite research showing that passive strategies like ETFs often deliver better returns after fees.
Lack of awareness:
In some cases, those within the industry simply don’t recognise how difficult it is to consistently pick individual securities that outperform over the long term. There’s a persistent belief that active management can beat the market, even when evidence suggests otherwise.
Stockspot Super’s commitment
Stockspot Super is committed to transparency, low fees, and long-term growth. By leveraging ETFs, we provide a clear alternative to the traditional super funds that often operate in a cloud of complexity. Our approach focuses on regular reporting, accountability, and a proven track record of investing in the best interests of our members.
As more Australians seek transparency and control over their investments, Stockspot Super is leading the charge by offering a straightforward, cost-effective solution that aligns with your financial goals. Whether you want to reduce fees, know exactly where your money is going, or benefit from a diversified investment strategy, Stockspot Super stands out as a smart option for your superannuation.
In a world where investors are demanding more transparency and efficiency, we believe Stockspot Super offers a simple yet powerful approach to managing your retirement savings.
When will Stockspot Super be available?
We are looking to launch Stockspot Super in late 2024. Join the waitlist to get early access. When we launch to the public, a PDS will be made available on the Stockspot website and you should read this as well as other relevant disclosure documents before making any decision to open an account.
