New superannuation product by Superhero allows members to buy individual shares
Superhero, the trading app known for low fees and fractional share trading, has launched a super product. Here's how it differs from a standard super fund.
Trading platform Superhero has launched its new superannuation product to the market after initially revealing its plans to do so back in December. Superhero Super offers consumers the ability to have more control over how their super is invested by giving them the ability to pick their own shares and exchange traded funds.
Superhero already offers a trading account with a flat $5 brokerage fee for ASX stocks, $0 brokerage on US stocks and the ability to buy fractional shares.
Read our full outline of Superhero Super here with all the details on how you can invest your money.
How does the Superhero Super product work?
The Superhero Super account will sit alongside your standard Superhero trading account, so you can access both products in the one app. The super account offers 2 different ways to invest your super, depending on the level of control you want.
The first option is called Autopilot. With this option, 70% of your super balance will be invested in an index ETF and you can invest up to 30% in a variety of themed ETFs. For example, you might choose to invest the full 30% into a health ETF or split it up between health and tech. You can also choose to invest more than 70% of your balance in the managed index fund, but no less than 70%.
The second option is called Control. This option has 25% of your balance invested in their index ETF and allows you to invest up to 75% of your balance yourself. And unlike the Autopilot option, with the Control option, you can actually invest in direct ASX300 shares and ETFs. This means you can choose individual shares listed on the ASX, such as Afterpay or Zip Co, to invest your super into.
The Autopilot option charges $1 per week plus 0.49% p.a. of your balance, while the Control option charges $2 per week plus 0.49% p.a. When you add in the indirect cost ratio of 0.26% p.a., if you had a $50,000 super balance you'd pay $424.40 in annual fees with the Autopilot account and $476.40 with the Control account. However, the Control account also charges $5 brokerage for each individual trade you do, so these fees could be much higher if you make a lot of trades.
How does Superhero Super compare
Spaceship's super product is likely one of the most similar options in the market as it's also a low-fee trading app that allows you to invest your super balance in shares and ETFs. In comparison to the fees above, Spaceship's Growth X super fund option would charge $536 in fees on a $50,000 balance.
Spaceship offers 2 different investment options too; however, both are managed funds that don't allow you to hand-pick your own investments. CEO of Superhero John Winters told Finder the main difference between Spaceship's 2 investment options and Superhero's new product is the ownership of the investments.
"Those are pre-determined managed funds. They're managed investment schemes that invest in the underlying ETFs. We offer direct ownership. So you'll invest it yourself how you want it, and you own the underlying ETF," he said.
"There's been a couple of products that have gone out with a promise that you can invest in US tech or stocks like Apple and Tesla, but with us, you actually can invest in individual companies."
It'll be difficult to compare Superhero Super's performance returns against other super funds because each member will be largely in charge of their own investments. Australian super funds have just had a record year for returns, with growth funds achieving upwards of 20% in 2021 (here are the top 10 performing super funds for 2021).