Spaceship super lowers fees and launches second investment option
The fund has also further increased its investment in technology assets.
Spaceship superannuation has today announced it will lower its fees, invest even more heavily in technology assets and launch its second investment option: Global Index Fund. The tech-focused super fund launched in January 2017 with just the one investment option, Growth X.
Since launch the fund has been aggressively marketing itself as shaking up the super industry and claims to be investing where the future is heading not where it's been. Despite a raft of negative media attention, with critics claiming the product targets potentially naive millennials with shiny technology then slams them with high fees, the fund has proved very successful to date.
I recently spoke with founder and CEO Paul Bennetts who said Spaceship has been growing at a rate of 10-20% month on month. The fund had $50 million in Australian retirement savings in the first 30 days of launching and hit $100 million in funds under management by April 2017.
Lower fees and more tech
Spaceship today announced it will lower the fees on its initial investment option, Growth X, from 1.60% p.a. to 0.99% p.a. Since launching, the fund has received criticism for its relatively high fees, especially considering it openly targets younger Australians with potentially much lower retirement savings. Bennetts said the decision to lower fees was one that was made with their members in mind.
“I think our members always want us to operate as efficiently as possible. Any cost savings that we have, they obviously want us to pass on to them and we agree with them. We’ll continue to lower fees as we get more scale in the business. It wasn’t at all to do with the negative press that we received. It’s just part of our business as usual. It’s just constantly trying to benefit our members," said Bennetts.
The fund has also rebalanced its Growth X investment option to include a 50% allocation in technology assets, including tech companies like Google, Apple, Facebook and Amazon. The investment option previously had a 30% allocation in tech.
Second investment option: Global Index Fund
Spaceship has today also launched its second investment option, Global Index Fund. This option has even lower fees at 0.65% p.a. and is focused on global assets. However, like Growth X, the new option is still classed as high-risk.
"Australian equities only make up 3% of the global market, but they make up 46% of all super fund equity exposure. As a young person, you’re holding super for the next 30 or 40 years. You should be investing globally or in countries that are really transforming the world," said Bennetts.
"Level 6 [risk level] is what both options are. We’re only targeting under 44 year olds at Spaceship. And that’s people with very long time horizons, so usually those people look to high growth or growth investment options."
Do consumers care about the technology offered by their super fund?
Spaceship prides itself on its technology-driven user experience, saying that the current super industry is outdated. It has also today unveiled a new web portal and dashboard including a range of resources for members.
Interestingly, research released last week revealed that of the factors Australians look for in a super fund, fees and performance were the two highest priorities, and technology was among the lowest priorities. Speaking of the research, Bennetts said it's not in line with what they're seeing at all.
"I think this generation is the generation that has grown up with smart phones in their pockets where they can easily access information on a small mobile screen, and they’re used to having wonderful user experiences within that small screen. That’s [the research] actually the complete opposite of what we’ve found."
In terms of what's next, Bennetts alluded to some new product offerings in the savings space, saying, “Over the next 12 months we will continue to release improvements to our existing offerings within super, but also seeing new products being released outside of super."
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