Millennial super fund Spaceship has raised $19.5 million – and tackled the biggest criticisms it faced
Millennial superannuation app Spaceship has responded to critics by cutting fees, increasing its exposure to tech stocks, launching a new investment option and forming an advisory board.
Some in the finance industry argued the 1.6% fee that the startup charged was not competitive. Another criticism of Spaceship, which opened to applications early this year, was that while it was marketing itself as a tech- and future-focused super option for millennials, it wasn’t actually investing in tech stocks any more than traditional pension funds.
“They get full marks for the use of flashy marketing and celebrity endorsers to distract people from the underlying financial product being sold,” he said.
“Look under the covers and you won’t find a tested process behind their investment strategy (to buy tech stocks), and no track record to support their high fees.”
To counter these criticisms, Spaceship has announced it will cut the fee to 0.99% and increase the tech component of its portfolio from 30% to 50%. The company has also introduced a second investment option – the Spaceship Global Index Fund – which charges just 0.65% and tracks the MSCI global index.
Spaceship chief executive Paul Bennetts told Business Insider cutting fees was a difficult task.
“Within superannuation there’s a thing called ORFR [operational risk financial requirement levy], which is a regulatory piece of capital you need – 25 basis points,” he said.
“The discretionary wealth players, the Stockspots of the world… Those guys are charging 95 to 100 basis points for effectively a very similar product to our 65 basis-point product.”
To read more about the Spaceship super fund, please click on the link below…