Super fund Superestate launches new low-fee investment option
Superestate members outside one of the fund's investment properties.
The new Balanced Essentials option enables members to invest in a portfolio of high-quality residential properties with low annual fees.
Superestate, a super fund that focuses on investing in residential houses around Australia, has launched a new low-fee investment option called Balanced Essentials. The portfolio is one of three portfolio options available to Superestate members and boasts annual fees that are up to half the price of some other popular balanced super funds in the market.
If a member had a $50,000 superannuation balance, the annual fees charged with the Superestate Balanced Essentials fund would be $291.50. The same amount invested in HostPlus Balanced would attract annual fees of $621, HESTA Core Pool (Balanced) sits at $573 and UniSuper Balanced sits at $497.
Superestate's Balanced Essentials portfolio allocates 10% of a member's balance towards residential property investment, in the form of physical houses around the country. Its Balanced Property option has a 25% asset allocation in residential property, and the Growth Property option allocates 50%. The rest of the member's balance is invested in local and international shares, infrastructure, fixed interest and cash.
CEO of Superestate Grant Brits said the new Balanced Essentials investment portfolio is a low-fee option that would appeal to a broad range of members.
"We wanted to have something that was very widely applicable and that's why we've come up with our low-fee option which is the Balanced Essentials. Our goal is to make the best superannuation products for our members and obviously fees are very very important. If we go back a year, we set our goal on creating the cheapest way to invest in residential property. What we came up with was a product that we think is very, very cheap but still gives people exposure to everything you'd expect from a super fund," said Brits.
Focus on investing in residential houses
Brits said the idea behind Superestate is giving young Australians access to residential properties in a way that's easy to understand, easy to access and with less of the risks.
"As soon as you talk about investments or superannuation, most people aren't interested or haven't had the chance to get educated about how it works. But property is something people tend to understand. The thought that someone could benefit from 30 or 40 years worth of rental income, as well as the increase in the house price, was something that we found everyone understood," he said.
"The challenge is a lot of young people don't have enough savings outside of their super to invest in property. Plus people don't necessarily know which property is a good one. That's why we took the portfolio approach. They don't need to personally go in and worry about making the right property selection."
Superestate currently owns three residential houses, one in Sydney, Brisbane and Adelaide. Brits said they aim to have at least another three or four by the end of 2019 and believes the current market, despite recent uncertainty, is a good opportunity to buy.
"From our perspective, any negativity or volatility in the property market actually creates great buying opportunities. When things go bad, residential property often doesn't go down as far as commercial or retail or anything like that. Because at the end of the day, with houses, people still need to live somewhere," he said.
"The reality is that 2019 is very different to how it was for our parents' generation. It just is. It's tough. If you live in a major city it's really expensive. But property is still something people want to own and have exposure to. We're trying to say "hey, here's an easy way to do it through your super and you don't have to worry about anything. We do all the worrying for you."
You can learn more about Superestate and its three investment options in our review.