Professional fund managers live and breathe investment returns. They can often be found getting their thrills studying complex candlestick charts or company balance sheets. Depending on what you’re invested in we charge a fee to pay professional fund managers who work hard to deliver strong super returns across our Core Pool, Eco Pool, Shares Plus, Conservative Pool
and our other Your Choice asset classes.
The investment fee is an estimate of the costs paid out of the fund in relation to the management of investments. The investment fee is not something that’s charged to you directly but reduces the return on your investment before we calculate unit prices, and they are applied to your account. So, the returns you see when you log into your online account or check your statement are after investment fees (and indirect costs – which we’ll talk more about later).
Each investment option will have a different investment fee and is charged as a reflection of how complex it is to manage that particular investment. For example, our Core Pool option has an investment fee of 0.73%. However, fees range in cost from between 0.02-2.74% depending on how complex they are to manage.
We calculate the investment fee on the costs incurred over the last financial year. This means that we don’t know what the investment fee will be for this year until it’s over. We do this because that’s part of the legislation. It’s confusing, we know, but it’s part of the reason why we’ve put together this information. On your annual member statement, you can see how much the investment fee was for that particular year under ‘Other fees of your investment.’
The table below outlines the different investment fees:
Indirect cost ratio
“An indirect cost ratio?” you ask. “What on earth is that?” The indirect cost ratio is your share of the indirect costs of managing your investments. Indirect costs are not paid by HESTA, but are incurred within investments, like the transaction costs incurred by investment managers. It’s like stamp duty when you buy a house, or other settlements costs that may be incurred when an asset is purchased.
Just like the investment fee, the indirect cost ratio is an estimate based on the last financial year and is not charged to you directly. It’s a cost that reduces the return on your investment before we calculate unit prices and they are applied to your account.
Super funds have the option to include indirect costs in the investment fee or to disclose these as two separate items. For that reason, you may see some funds with just an investment fee and no indirect cost ratio. At HESTA, we choose to disclose them separately, so you can see what your investments are paying for.
If you’re in our Core Pool option, the indirect cost ratio is 0.10%. So, on a super balance of $50,000, you’ll incur a fee of $50 (0.10% x 50,000 = $50).
If you’ve made a different investment choice, the percentage varies between 0.00%-1.05% per annum. The table below outlines the different indirect cost ratio fees*:
If your account balance is less than $6,000 at the end of the HESTA income year, the total combined amount of administration fees, investment fees and indirect costs charged to you is capped at 3% of the account balance. Any amount charged in excess of that cap must be refunded.
At its very heart, insurance is about providing a safeguard for when things go wrong. It protects your quality of life. The benefit of insurance through super is that we can negotiate a group rate with insurers, so we’re then able to pass the savings on to you.
At HESTA, we provide two units of death cover and two units of income protection cover by default to members when they join.* If that’s not the right fit for you, you can change or cancel your cover at any time.
The fees for insurance vary with age and will also depend on the type of cover you have – if you’ve elected to change it. You can read more about insurance in the Insurance Options guide.
We charge other fees to cover one-off costs for particular services you might use. The only activity fees we charge are for contribution splitting ($60) and family law account splitting ($80).
*Investment fees and ICRs are indicative only and are based on investment costs for the year ended 30 June 2020, including several components which are estimates only.
The actual amount you will be charged in subsequent financial years will depend on the actual costs incurred in those years. Past costs may not necessarily be an indicator of future costs. Fees and costs are rounded to two decimal places.