Investment fees

Investment Management Fees and costs

Investment management fees and costs are made up of two components:

1) Investment fees; and
2) Indirect cost ratio.

Investment Fee

An investment fee is a fee that:

  • a member pays (or is paid out of a member’s account balance) that relates to the investment of the assets of a superannuation entity; and/or
  • fees in payment for the exercise of care and expertise in the investment of the assets of a superannuation entity (including performance fees) that are not paid out of a member’s account balance, but are deducted from the investment returns, before these are attributed to member accounts.

WA Super’s investment fee is an estimate of investment costs which are not charged as a fee to members but are deducted from the Fund’s investment returns (in a manner similar to the indirect cost ratio). Because the investment fee is only an estimate of investment costs, and is based on the costs incurred in the 2016-17 Financial Year, the investment fee may actually be higher or lower than what is disclosed in this document.

The investment fee includes internal investment staff fees and costs (such as custody, asset consulting, and external investment manager fees and associated performance fees) paid by WA Super to third parties directly out of WA Super and are most commonly fees which would not be incurred if you invested directly in an asset. Transactional costs and other expenses that are deducted from the returns on assets that are held by a fund manager, for example, are considered to be indirect costs because these amounts are deducted from investment returns before these are paid back to WA Super by the fund manager.

Each investment option has more than one investment manager who may charge different fees. This means that the actual amount deducted from any earnings on a particular option can vary.

A number of the Fund’s professional fund managers within the investment options are paid Performance Based Fees, if the manager exceeds an agreed performance target. If applicable, the fee is generally based on a percentage of earnings above an agreed benchmark. Performance Based Fees are included in investment fees and/or indirect costs, dependent upon the nature of their payment (for example if WA Super pays these directly, or if a manager deducts them from investment returns before paying WA Super a dividend, for example) and are not an additional fee.

Indirect Cost Ratio

The ICR for a MySuper product or an investment option is the ratio of the total of the indirect costs for the MySuper product or investment option, to the total average net assets of WA Super attributed to the MySuper product or investment option, to the extent that these costs are not reported as an “investment fee”. The ICR represents amounts that are not deducted directly from member accounts, but are deducted from the investment returns, before these are attributed to member accounts.

Certain components of the ICR are disclosed as “investment fees”, as required by legislation, even though these amounts are not deducted directly from member accounts. Therefore, ICR includes all other indirect costs that are not included in the investment fee. Many of these costs included in the ICR would be incurred by you to varying degrees if you invested directly in the asset.

Investment fees and the indirect cost ratio will include certain transactional and operational costs such as brokerage, buy-sell spreads, settlement expenses, stamp duty, risk analysis, legal and tax due diligence. These cost arise when investments are bought and sold and can vary depending on how many and how often assets are bought and sold. All of these costs are disclosed as part of either the investment fee or indirect cost ratio. These expenses are an amount that can be paid to either the product issuer or an external investment manager or both.

The Investment Management costs in the table below are based on the actual costs incurred in the 2016-17 Financial Year as an estimate of fees for the forthcoming period and are intended to be indicative only. Future actual Investment Management costs will vary depending on the managers used and the performance of the market.

Investment Management Costs

Investment Option

Investment fee (IF)

Indirect Cost Ratio (ICR)

Total (ICR + IF)

MyWASuper

0.54%

0.34%

0.88%

Diversified High Growth 

0.58%

0.37%

0.95%

Diversified Conservative 

0.48%

0.28%

0.76%

Australian Shares

0.26%

0.19%

0.45%

Global Shares

0.36%

0.12%

0.48%

Sustainable Future 

0.61%

0.11%

0.72%

Property and Infrastructure 

0.72%

0.41%

1.13%

Bonds

0.28%

0.13%

0.41%

Cash

0.17%

0.00%

0.17%

Borrowing Costs and Property Operating Costs

Option

Borrowing Costs*

Property Operating Costs^

Diversified Conservative

0.02%

0.02%

Diversified Moderate

0.02%

0.02%

MyWASuper

0.02%

0.02%

Diversified High Growth

0.03%

0.02%

Australian Shares

0.00%

0.00%

Bonds

0.00%

0.00%

Cash

0.00%

0.00%

Global Shares

0.00%

0.00%

Property & Infrastructure

0.13%

0.15%

Sustainable Future

0.00%

0.00%

* Borrowing costs are expenses incurred in relation to borrowing money, such as interest and loan establishment fees. WA Super does not borrow money, but we do invest in entities that can borrow money.

^ Property operating costs are amounts that are payable in relation to the operational expenses associated with real property or an interest in a real property.  It excludes amount paid for the acquisition or disposal of a property.

Updated 23 July 2018.