The Australian Superannuation fund I use has no fixed annual fee, no percentage based management fee, and no investment fee.
(The fund is EISS - link to their Product Disclosure Statement here)
Instead, the only cost seems to be the 'Indirect Cost Ratio', which is 1.08% for the high growth fund.
I'm having trouble understanding exactly what this cost is. From the PDS it says:
These costs are referred to as indirect costs because these are not deducted directly from your account, instead these costs indirectly reduce your investment value or return. The ICR is intended to facilitate comparisons of products across superannuation funds.
I'm having trouble understanding what exactly this is.
Specifically - should I be treating this cost as something that occurs year on year on the total or my balance, or as something to occurs as the money enters the super fund?