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Transaction and Operational costs,
Property Operating costs and Borrowing costs


All super funds need to comply with rules for telling members about their fees and costs.  The following costs can form part of the investment fee, indirect cost ratio or be reflected in the unit price used to calculate your returns.  These are not new or extra fees and costs.
 

Rest Super, Rest Corporate, Acumen, Rest Pension Transition to Retirement

The following table has the estimated transaction and operational, borrowing and property costs based on the 12 months ended 30 June 2019.

Investment option Estimated gross transaction and operational costs (pa)* Estimated borrowing
costs not included in the investment costs (pa)
Estimated property
operating costs not
included in the investment costs (pa)
 Buy-spread range (pa)
  Implicit cost Explicit cost      
Core Strategy 0.09% 0.10% 0.09% 0.06% 0.02-0.18%
Capital Stable 0.13% 0.06% 0.08% 0.03% 0.03-0.10%
Balanced 0.14% 0.08% 0.09% 0.04% 0.04-0.12%
Balanced - Indexed 0.00% 0.00% 0.00% 0.00% 0.05-0.10%
Diversified 0.12% 0.10% 0.09% 0.05% 0.06-0.13%
High Growth 0.11% 0.11% 0.09% 0.05% 0.07-0.16%
Basic Cash 0.01% 0.00% 0.00% 0.00% 0.01-0.03%
Cash 0.00% 0.00% 0.00% 0.00% 0.01-0.03%
Bonds 0.07% 0.00% 0.00% 0.00% 0.02-0.05%
Shares 0.07% 0.11% 0.00% 0.00% 0.05-0.10%
Property 0.00% 0.25% 0.74% 0.59% 0.31-0.47%
Australian Shares 0.09% 0.13% 0.00% 0.00% 0.05-0.10%
Australian Shares - Indexed 0.00% 0.00% 0.00% 0.00% 0.08-0.13%
Overseas Shares 0.06% 0.10% 0.00% 0.00% 0.05-0.10%
Overseas Shares - Indexed 0.00% 0.00% 0.00% 0.00% 0.05-0.10%
 


Rest Term Allocated Pension, Rest Pension

The following table has the estimated transaction and operational, borrowing and property costs based on the 12 months ended 30 June 2019.
 
Investment option Estimated gross transaction and operational costs (pa)* Estimated borrowing
costs not included in the investment costs (pa)
Estimated property
operating costs not
included in the investment costs (pa)
Buy-spread range (pa)
  Implicit cost Explicit cost      
Core Strategy 0.09% 0.10% 0.09% 0.06% 0.02-0.18%
Capital Stable 0.13% 0.06% 0.08% 0.03% 0.03-0.10%
Balanced 0.13% 0.08% 0.09% 0.04% 0.04-0.12%
Balanced - Indexed 0.00% 0.00% 0.00% 0.00% 0.05-0.10%
Diversified 0.11% 0.10% 0.09% 0.05% 0.06-0.13%
High Growth 0.11% 0.11% 0.09% 0.05% 0.07-0.16%
Basic Cash 0.01% 0.00% 0.00% 0.00% 0.01-0.03%
Cash 0.00% 0.00% 0.00% 0.00% 0.01-0.03%
Bonds 0.07% 0.00% 0.00% 0.00% 0.02-0.05%
Shares 0.06% 0.11% 0.00% 0.00% 0.05-0.10%
Property 0.00% 0.25% 0.74% 0.59% 0.31-0.47%
Australian Shares 0.07% 0.12% 0.00% 0.00% 0.04-0.10%
Australian Shares - Indexed 0.00% 0.00% 0.00% 0.00% 0.08-0.13%
Overseas Shares 0.06% 0.10% 0.00% 0.00% 0.05-0.10%
Overseas Shares - Indexed 0.00% 0.00% 0.00% 0.00% 0.05-0.10%
 


Estimated gross transaction and operational costs

Transactional and operational costs are a broad category of costs that relate to the buying and selling of investments (including investments in underlying assets). These costs will be influenced by the type of investment, the asset class and the investment managers involved in relation to that investment option. Accordingly, the transactional and operational costs will differ between the investment options.

Transactional and operational costs are made up of explicit and implicit costs and are an additional cost to members. The estimated amounts shown in the table above reflect all implicit and explicit transaction and operational costs incurred for the 12 months to 30 June 2019. Past fees and costs are therefore not an indication of future fees and costs.

Explicit costs can include:

brokerage costs – the amount paid to a broker when buying and selling underlying securities such as shares and derivatives
settlement fees – the amount paid to manage transaction settlements
stamp duty - tax placed on legal documents in the transfer of assets or property.

Implicit costs

These costs may be embedded in the price of the asset and can include things like bid/offer spreads (the difference between the price a buyer is willing to pay (the bid price) and the price a seller is willing to accept (the ask price) for a particular security). These are usually incurred by investment managers buying and selling fixed income securities, foreign currency conversions and listed equities. These implicit costs usually need to be estimated as they are not known with certainty.
 

Explicit transaction costs are included in the investment fee or the indirect cost ratio of the relevant investment options. They are reflected in the investment option’s unit price.

Some of these transactional and operational costs are also reflected in the buy/sell spread for each investment option.  The buy/sell spread is a fee charged when transacting at the investment option level to recover some of the transactional and operational costs incurred in buying and selling the investment option’s underlying assets.

Estimated borrowing costs

Borrowing costs are the expenses related to borrowing money by Rest and its interposed vehicles for investments and include costs associated with a credit facility such as interest, loan establishment fees and associated legal costs. Rest does not incur significant borrowing costs as superannuation legislation does not permit borrowing, except in very limited circumstances. However, we are permitted to invest in vehicles that can borrow.

We estimate these borrowing costs based on actual information available and/or reasonable estimates for the year ending 30 June 2019. Borrowing costs are an additional cost to members. However, they are incurred to enable returns on members’ capital to be increased through a reasonable amount of leverage. Borrowing costs only reduce members’ returns when an investment has significantly underperformed and the borrowing costs exceed the returns generated on the borrowed capital. Borrowing costs are deducted from the assets or income of the underlying relevant investment options (where applicable) and reflected in the calculation of daily unit prices. They are not charged as a separate fee, and may vary year to year.

Estimated property operating costs

Property operating costs are the expenses related to operating properties by Rest and its underlying investment vehicles and include costs such as council and water rates, utilities, cleaning, maintenance and lease renewal costs. We estimate property operating costs based on actual information available and/or reasonable estimates for the year ending 30 June 2019.

Depending on the property, these are either directly recovered from the tenants of the property or indirectly through rents. The estimated property operating costs reflect the gross property operating costs incurred and do not take into account any of the costs recovered. Property operating costs are an additional cost to members in that they reduce the return that members may receive from the underlying investment. However, they are necessary expenses to enable income to be earned from the relevant property investments. Property operating costs are reflected in the calculation of daily unit prices. They are not charged as a separate fee. Property operating costs may vary year to year.

For information about the fees and costs of your Rest investment, please read the ‘Additional information on fees and costs(Rest Super and Rest Corporate members) or your Member Guide (Acumen members).

This website is provided by Retail Employees Superannuation Pty Limited ABN 39 001 987 739, AFSL 24 0003 (Rest), trustee of Retail Employees Superannuation Trust ABN 62 653 671 394 (Fund), of which Rest Super, Rest Corporate, Rest Pension and Acumen are part. It contains general advice that has been prepared without taking account of your objectives, financial situation or needs. Before acting on the information or deciding whether to acquire or hold a product, consider its appropriateness and the relevant Product Disclosure Statement (PDS), which is available on this website. The cost of providing financial services is included in the fees in the Fund as disclosed in the relevant PDS. Rest and the Fund do not charge any additional fees or obtain any commissions for the advice provided. Rest’s employees are paid a salary and do not receive any commissions. They may receive a performance related bonus that takes into account the financial services provided. Super Investment Management Pty Limited (ABN 86 079 706 657, AFSL 240004), a wholly owned subsidiary company of Rest, manages some of the fund’s investments. Apart from this, Rest does not have any relationships or associations with any related body corporate or product issuer that might reasonably be expected to be capable of influencing Rest in providing financial services.

Rest personal advice is provided by Rest Advisers as authorised representatives of Link Advice Pty Ltd ABN 36 105 811 836 AFSL 258145

Awards and ratings are only one factor to consider when deciding how to invest your super. Further information regarding these awards can be found at rest.com.au/about-rest/awards. Past performance is not an indicator of future performance. SuperRatings Pty Limited does not issue, sell, guarantee or underwrite this product. Go to superratings.com.au for details of its ratings criteria. For further information about the methodology used by Chant West, see www.chantwest.com.au