Industry fund legalsuper has added a new index investment option, which will be managed by State Street.
The new investment option had a management fee of 0.12 per cent, which was 0.64 per cent lower than SuperRatings' all-fund median investment fee, the fund said.
A member with an account balance of $50,000 in the new low-fee index investment option will incur a total fee of $262.60 or 0.53 per cent, including investment and administration fees.
The partnership with State Street demonstrated that specialised funds such as legalsuper could acquire and pass the benefits of scale onto members without having to be mega funds, legalsuper chief executive Andrew Proebstl said.
Proebstl said the new option was launched on the back of member demand.
"With investment markets continuing to be volatile, some members of the legal profession expressed interest in an investment option that has less volatility and lower fees. The launch of this option is in direct response to this member feedback," he said.
"Index funds are not actively managed and therefore less trades are made, which in turn means lower brokerage fees and capital gains tax."
Until now, legalsuper only offered actively managed investment options.
"With the launch of the new low-fee index investment option, legalsuper now offers both active and passive investment styles to its sophisticated membership," Proebstl said.
The index option has a 73 per cent allocation to growth assets and 27 per cent allocation to defensive assets, which is broadly in line with a balanced fund option.
"The option aims to generate a positive return three out of every four years," Proebstl said.
