investments
Investment costs explained
Here’s a simple explanation of our investment costs.
Investment costs
At UniSuper, we aim to keep our fees and costs low. So we don't pay commissions to agents or shareholder dividends, and all profits are returned to members' accounts.
However, most of our assets are invested through professional external investment managers who charge fees for managing UniSuper's investments. These fees are deducted from investment returns before the returns are credited or debited to your account.
Indirect Cost Ratio
The fees that are deducted from investment returns before they are applied to your account are collectively known as the Indirect Cost Ratio (ICR).
The ICR includes all internal and external fees incurred in managing the funds. This includes:
- a Member Protection Levy of 0.036% that protects small account balances (accumulation super only)
- fees charged by external investment managers, and
- custodial and valuation fees.
The actual amount you will be charged each financial year depends on the size of the fund, the type of assets held, the investment mandates given to the investment managers, the actual investment performance achieved and any performance-based bonuses paid.
Expense ratios for UniSuper investment options
Indirect Cost Ratio (%) at 30 June 2008
| Accumulation Super |
Pensions† |
|
|---|---|---|
| Cash | 0.17 | 0.14 |
| Capital Stable | 0.26 | 0.22 |
| Conservative Balanced | 0.30 | 0.26 |
| Balanced | 0.46 | 0.42 |
| Socially Responsible Balanced* | 0.71 | 0.67 |
| Growth | 0.57 | 0.53 |
| Socially Responsible High Growth^ | 0.65 | 0.62 |
| High Growth# | 0.69 | 0.65 |
| Australian Fixed Interest§ | 0.12 | 0.09 |
| Listed Property§ | 0.20 | 0.16 |
| Australian Shares§ | 0.37 | 0.33 |
| International Shares§ | 0.33 | 0.29 |
* The ICR for the Socially Responsible Balanced option is an estimate only, based on known costs at 1 January 2008.
^ On 1 July 2007, the Socially Responsible Shares investment option changed its name to Socially Responsible High Growth. Over time the asset classes it invests in will also change.
# On 1 July 2007, the Shares investment option changed its name to High Growth and the asset classes it invests in changed.
† The ICRs shown for Pensions include all internal and external fees incurred in managing these funds. They do not include the Member Protection levy.
§These investment options were introduced on 1 July 2008. Their ICRs are estimates only, based on known costs at 1 July 2008.
It is important to note that the ICRs shown are indicative only. The ratios are calculated on the previous financial year’s returns. As such, the figures provided represent the most up-to-date information available at the time of publication. Assuming that the investment options perform in a similar manner to that of the previous financial year, the fees shown are an approximation of what you may be charged.
Performance-based fees
Performance-based fees are sometimes paid when an investment manager performs above an agreed benchmark. In these instances the investment manager may be awarded a percentage-based fee over and above their base fee.
For the year ending 30 June 2008, performance-based fees paid by UniSuper totalled $14,552,756. This figure is included in the ICRs shown above.
Performance-based fees can increase the ICR for the options that have benefited. But we are careful to ensure that the benefits to members outweigh the costs of any performance-based fee.
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