Innholdsfortegnelse for December 2017 i Money Magazine

How has 2017 worked out for you? Maybe you paid off some debt, started investing in an ETF, bought your first home or boosted your super? Hopefully you did kick a few financial goals and you’re feeling confident. The reality, though, is that a combination of high household debt, low wages growth, low yields and a jump in energy and gas prices have all weighed heavily on our wallets. Greg Hoffman (page 40) says there is plenty to worry about in a country that hasn’t experienced a recession in 27 years – “one in which many households have borrowed to the hilt to get into expensive housing markets in several cities”. On the other hand, Shane Oliver (page 44) is a little more optimistic about the opportunities. As he says,…

EFFIE ZAHOS Money editor Effie says: “Slowing down a little and enjoying my family. Tying up loose ends so I can stop thinking about what needs to be done. Head home to the Goldie and unwind with barbecues, day-time drinking and going for a dip at Tallebudgera Creek.” ANN LOVEDAY Money’s art director Ann says: “I’ll be very happy in the frame, entertaining and feeding pals at home and mixing up my best margaritas. For me there’s a contentment to summer in Sydney, the drone of cicadas, the scent of frangipani, the warmth of the sea and the hustle of a busy home BBQ. Bring it on.” MARIA BEKIARIS Maria, Money’s deputy editor, says: “Lazy days reading and watching the kids playing in the backyard, catching up with friends and family…

Has the Sydney property market peaked? The headlines use the word “pivoted”, claiming the boom is over and the phenomenal growth has come to an end. But it’s irrelevant commentary because nobody is buying “Sydney”! Instead, they’re buying a single property in a localised street in a localised neighbourhood within a highly fragmented property landscape. Property is an essential need and remains that way whether the market is going up, down or sideways. So how should investors navigate this market? Focus on the core fundamentals (at suburb level) indicating that demand still exceeds supply: • Days on market – are buyers still eagerly snapping up properties or are they hanging around? • Stock on market – is the suburb undersupplied or are there plenty of listings? • Auction clearance rate…

Longer life expectancies, declining government support and a reduction in job security mean people need to reconsider their approach to retirement, says author David Kennedy. The book, which features inspirational stories and case studies from a broad cross-section of retirees, offers tips on how to adapt to the changing retirement landscape. For example, there’s a chapter on finding an age-friendly employer and another on how to use social media to boost job prospects. You’ll also find strategies to help prepare for life after work. Ten readers can win a copy. In 25 words or less, tell us how you are preparing for retirement. Send entries to Book of the Month, Money, GPO Box 4088 Sydney, NSW 2001 or email money@bauer-media.com.au. Don’t forget to include your name and postal address. Entries…

Affordability, the rising cost of living, our ageing population and increasing multiculturalism are driving a revolution in the way we use our homes, says John McGrath, founder and executive director at McGrath. He says some of the things we’re seeing are the rise of multi-generational living and homeowners looking for ways to make money from their homes. In Sydney, the prevalence of people living in multi-generation homes has increased by 31.8% in just 10 years, according to Census data. The growth is partly a result of extended families looking to help each other both financially and in terms of lifestyle, particularly in our major capital cities, where housing and the cost of living is most expensive, says McGrath. “We are also seeing a strong trend in homeowners seeking ways to…

Are we over credit cards? Latest statistics from the Reserve Bank suggest there is certainly some loss of appetite. Both July and August figures show total balances outstanding remain at $51.3 billion, down from $52.3 billion in May and June. Balances accruing interest remained at $31.4 billion. It could just be a temporary lull or it could mean that consumers are looking elsewhere for their quick credit fix. Peter Gray, co-founder and chief operating officer at zipMoney, the company behind zipPay virtual wallets, believes Australia may be reaching what he calls “peak credit card”. “Alternate payment solutions are gaining momentum,” he says. “Peak credit card is the point at which maximum credit card usage is reached and we just may be nearing that.” He says banks aren’t doing a good…

The sharemarket is up and running and chances are that it will keep going for the rest of the year. There is more than one reason why this might be the case. First, while governments here and around the world have saddled themselves with trillions of dollars of debt (for a variety of reasons, but in Australia it is basic mismanagement – aided by an obstructive senate – of revenue versus expenses). But while that has been happening, businesses have taken advantage of low interest rates to improve the strength of their balance sheets by paying down debt. That being the case, many companies are in the position to make takeovers, which also propels the stockmarket. There’s something else, though: an appetite for stockmarket risk – almost a maturity of…

Australia’s first dairy cows arrived in 1788 with the First Fleet. Understandably, poor grazing country, a lack of refrigeration and the overriding need for meat saw cows eaten and the nascent dairy industry put on hold. Towards the end of the following century, as refrigeration become more advanced and milk and its by-products could be stored and transported, co-operatives were established to process and market produce. The industry was originally regulated to organise the export of Australia’s dairy products. In the 1980s and 90s, state governments controlled pricing for fresh milk and state dairy corporations were established to regulate quality and production. The result was that farmers who sold their milk into the domestic market received better prices than those who exported it. With prices needing to fall, the deregulation…

BEST FUND MANAGER GOLD WINNER PERPETUAL MICHAEL O’DEA HEAD OF MULTI-ASSET FUNDS, PERPETUAL Looking back over the past year, investment markets have had a wild ride. The US hit successive record highs, buoying its Australian counterpart to perform solidly, while real estate trusts slumped and fixed interest softened. For lone investors, selecting the right shares, bonds and asset classes is tricky. There is a smorgasbord of potential investment managers, with hundreds now available in Australia. Three research houses, Morningstar, Lonsec and Zenith, have rated this year’s best fund manager, Perpetual, highly in three categories: Australian shares, small companies and diversified funds. Perpetual is an active manager with an investment process that identifies high-quality value companies. It has a long history as a value investor and spawned some of Australia’s most…

GOLD WINNERS ARROWSTREET AND MAGELLAN These funds have made the most of the many growth opportunities overseas Many overseas markets turned in much better performances than the local market over the past 12 months, resulting in strong one-year returns for all the international funds in the winners’ circle. Joint winners three years in a row are Arrowstreet Global Equity and Magellan Global. Arrowstreet Global Equity gives investors exposure to a diverse collection of international stocks, including emerging markets and small caps. It uses an active, quantitative investment approach, looking to consistently outperform the benchmark through varying market conditions. “This strategy can swing portfolio exposures around quite substantially and at short notice,” says Morningstar analyst Elliot Lucas. “High turnover and the need to time the entry and exit of positions appropriately is…

GOLD WINNER LA TROBE An experienced, professional team has again delivered the goods For nine years in a row La Trobe’s 12 Month Term Account, formerly the Pooled Mortgages Fund, has taken out this award. And as in previous years it’s the only mortgage fund that the three judges – Lonsec, SQM Research and Zenith – believe deserves an award in this category. This fund particularly appeals to investors seeking regular income as it pays distributions monthly. The annual return to September 30 is 5.33% and the minimum holding period is 12 months. La Trobe only lends for properties where it has a registered first mortgage and will not undertake related-party lending. SQM Research assigns it a 4.25-star “superior” rating. Among the reasons it gives for this are: • The…

BEST ETF PROVIDER GOLD WINNER VANGUARD DANIEL REYES HEAD OF INVESTMENTS, ASIA-PACIFIC It is no wonder that Vanguard wins the award this year for Best ETF Provider. It is the greatest disruptor of the investment world. In the 1970s, founder Jack Bogle took on Wall Street’s high-fee, high-turnover active investment managers by offering low-fee, low-turnover index funds. The $5.9 trillion group hasn’t stopped disrupting the poor practices of the investment world and changing the way people invest. Investors in Australia benefited again in November 2017 when Vanguard launched four diversified ETFs with different levels of risk. While diversified funds aren’t new – there are hundreds of unlisted multi-sector managed funds – Vanguard’s four are the first for the listed ETF landscape in Australia. What is revolutionary is the cost: a…

GOLD WINNERS ISHARES AND VANGUARD Investing in quality fixed-interest securities reduces volatility and risk Our two winners, iShares Core Composite Bond and Vanguard Australian Fixed Interest Index, both invest in quality AAA and AA Australian government and semi-government bonds. They follow the same index, the Bloomberg AusBond Composite 0+Year, with roughly 73% in AAA-rated securities, 20% in AA bonds and around 7% in A and BBB bonds. Both ETFs charge the same investment management fee of 0.20%pa. While returns from government bonds have been lacklustre over the past year, investors hold fixed-interest securities to diversify their risk in times of falling sharemarkets. The ideal investment time horizon for both ETFs is a medium term of between three and five years. The success of the second placegetter, BetaShares Australian High Interest…

GOLD WINNER WESTPAC Low rates and a generous credit limit can get investors off on the right foot For the third year in a row Westpac has taken out the cheapest margin loan award. “For a price-conscious investor, Westpac offers customers the cheapest fixed and variable rates,” says Emily Horton, a research analyst with Canstar. “For a loan amount of $50,000, Westpac’s variable rate was 1.39% lower than the market average, and its fixed rate sat 1.59% below the average.” Westpac allows clients to borrow up to $500,000, with security ranging from ASX-listed shares to a range of exchange traded funds and managed funds. Investors have 24/7 access to their portfolio, and can get a complete picture of their borrowings and shares in the one place. There are no application,…

GOLD WINNER FP MARKETS Phone traders receive the same low-cost service as their online counterparts, including plenty of market information First Prudential Markets, a broker that has never charged its phone traders more than its online traders, has won this award for the ninth year in a row. “FP Markets have notably cheaper brokerage fees on a $10,000 phone trade at $14.95, $44.50 lower than the market average of $59.45,” says Emily Horton, research analyst with Canstar, which judged these awards. This makes FP a compelling choice for anyone who prefers to trade over the phone. The broker is also competitive in the overall low-cost stakes, coming in at fourth in the cheapest broker category. FP Markets’ free research portal offers an extensive range of information to help investors make…

GOLD WINNER HOSTPLUS Diversified asset allocation helps protect members’ savings and boost returns The Hostplus Balanced super fund has consistently ranked as the top-performing balanced fund over one, three, five and seven years for its 1.1 million members. With $30 billion under management, the fund has a wide range of assets that include 40% in unlisted investments such as property, infrastructure, credit and private equity. David Elia, CEO of Hostplus, points out that the unlisted property and infrastructure has outperformed low cash and bond rates by 7% over the past financial year. The fund’s equity and credit asset classes are largely invested along active lines but small amounts are allocated to index managers. He says the active equity managers in developed markets outperformed the index by 3% in the past…

GOLD WINNER INTRUST SUPER Competitive premiums and generous payouts provide a double benefit Intrust Super has picked up the gold award for the sixth consecutive year for its standout life, total and permanent disability (TPD) and income protection insurance. The Queensland-based fund, which was set up to cover hospitality workers and is now open to the public, recently reduced its premiums for both income protection (by up to 12%) and group life and TPD (by 7%) without any changes to terms and conditions. Intrust’s PayGuard income protection insurance for sickness or injury is for casual, part-time and full-time employees. It pays up to 90% of the member’s wages or salary as they recover. It pays an additional amount equal to 10% of those payments to the member’s super account. It also…

GOLD WINNER ANZ A lifestage option that matches investment strategy with age is proving popular ANZ Smart Choice wins for the fourth consecutive year by investing in Vanguard’s low-cost index funds and keeping fees to a flat $50 a year for administration, 0.5% on investments and no fees for cash. The pension allows members to choose either automatic life-stage investments that become more conservative as they age or their own personalised investment mix from particular asset classes or pre-mixed diversified options. To date the lifestage choice is the most popular and demand is highest from people born in the 1960s, ’70s and ’80s. The lifestage pension has a broad range of investments which include Australian shares, international shares (both hedged and unhedged), emerging markets, listed property, listed infrastructure, global and…

GOLD WINNER REST Roger makes it easier to get the answers to any questions REST’s virtual agent, called Roger, utilises artificial intelligence and knowledge management tools. Roger can be found under the REST website’s “Ask Us” search bar and answers members’ questions. If it can’t help, it can hand customers, with the history of their conversation, over to a live chat. Since Roger was introduced members have asked around 230,000 questions, which it could answer in 96% of cases. It has improved member satisfaction, as they no longer have to sift through the website. REST also offers an impressive interactive annual statement, sent to members via email or SMS, that can be accessed with simple information rather than a password. The statement allows members to check their account balance, transaction…

GOLD WINNERS BANK RABODIRECT NON-BANK QUEENSLANDERS CREDIT UNION A “cure” for itchy fingers, plus a decent interest rate, will help you reach your goals The “notice saver” style of account offered by our winner, RaboDirect’s 90 Day Notice Saver account, is a great idea for people with itchy fingers who can’t resist the temptation to dip into savings. Deposits can be made at any time but you can only access your money after providing 90 days’ notice. It makes the account, which also won last year, a smart way to stay on track with savings goals. Along with the benefit of a strong rate, the saver account is fee free. But be warned: you cannot access your funds before the notice period is served – not even in an emergency.…

GOLD WINNERS BANK SUNCORP NON-BANK CUA In an era of record low rates, an SMSF can still get a decent return on its supply of cash Not all savings accounts are available to self-managed super funds (SMSFs) – many can only be held and operated by an individual rather than a trustee. However, Australia’s 596,000 SMSFs can find strong returns among our winners, and Suncorp in particular has consistently delivered healthy rates to SMSFs, having also taken out this award last year. Suncorp’s FlexiRates work like a hybrid between a term deposit and a regular savings account. They are available on a number of Suncorp’s savings accounts, and they apply if you agree to lock away a portion of your fund’s savings for a specific period. It’s important to be…

GOLD WINNERS BANK BEYOND BANK NON-BANK COLES Repayments are easy to manage during the generous interest-free periods If you pay off your card balance in full each month, you’re what banks refer to as a “transactor”. For you the interest rate isn’t important, and it pays to look for a low annual fee and maximum interest-free days. Beyond Bank has a strong track record for transactor cards, having won this award each year since 2015. The generous interest-free period of 62 days is hard to beat, and Beyond’s Low Rate Visa comes with a handy “AutoPay” function that makes payments easy to manage. It lets you set up automatic payments – a set amount, the monthly minimum or, to be sure you won’t pay interest, the total card balance every…

GOLD WINNERS INTERNATIONAL AMERICAN EXPRESS DOMESTIC AMERICAN EXPRESS Would-be travellers can get off to a flying start if they play their cards right Amex’s Platinum Edge Credit Card is linked to nine airline partner programs, including Virgin Velocity, Emirates Skywards and Etihad Guest. Earn three points per $1 spent at supermarkets, two points at major service stations and one point on other purchases. Payments for bills from utilities earn half a point per $1. Along with complimentary worldwide travel insurance, cardholders can earn a $200 travel credit each year when bookings are made and paid for through American Express Travel. Amex’s Explorer Credit Card accrues up to two reward points per $1 spent and offers a choice of eight partner airline programs. New cardholders who apply for the card online…

GOLD WINNERS BANK OF MELBOURNE, BANK SA AND ST.GEORGE Keep personal and work finances separate and your accountant will love you When starting a business, there’s always the temptation to use a personal credit card. However, with a business credit card you can track your expenses and keep your personal and business spending separate. Besides, the separation of business and personal affairs will delight your accountant and shave your future bookkeeping expenses. Business cards offer more flexibility than a personal credit card and may even allow you to split up expenses according to the different departments or divisions in your business. Business owners and their employees can then use the cards to pay for monthly fuel, accommodation and other business expenses. For example, Bank of Melbourne’s Business Vantage Visa gives…

GOLD WINNERS BANK ING NON-BANK PACIFIC MORTGAGE GROUP Features such as redraw and offset can mean big long-term savings Who said that you had to compromise on features if you want rock-bottom prices? All six placegetters here offer both redraw and offset. While both essentially do the same – reduce the amount of interest you pay – the offset facility offers more. The ability to link your loan to a transaction account, so every dollar you have in this transaction account “offsets” your debt, can mean big savings with little pain. Once again Pacific Mortgage Group (PMG) shows the strength of non-banks in today’s market, coming up No. 1 as the cheapest flexible home loan for the third consecutive year. Its standard variable loan offers free unlimited redraw transactions and, as with…

GOLD WINNERS BANK BANKVIC NON-BANK STATE CUSTODIANS You can boost your wealth by tapping into the valuable equity in your home These loans work like a revolving line of credit, allowing homeowners to tap into the equity in their property. For instance, a lender may value your home equity at $200,000 and, assuming you are approved to borrow 80% of this, a line of credit provides easy access to $160,000 – these are funds that can be used virtually as you choose. A line of credit loan will impact the value of your equity but not necessarily in a negative way. For instance, if the money is used for renovations that improve the value of your home, the end result can be an uptick in your overall equity. In fact,…

GOLD WINNERS BANK BEYOND BANK NON-BANK HOLIDAY COAST CREDIT UNION Having the finances organised takes much of the hassle out of a visit to the dealer Beyond Bank’s low-rate car loan is available for new or used cars manufactured no earlier than the start of the previous calendar year. Loan pre-approval is available, which lets car buyers negotiate at the car yard with confidence. Additional repayments are permitted, and redraw is available if funds are needed in an emergency. Link the car loan to Beyond’s car budget account, a transaction account designed to help motorists save for vehicle costs such as registration, and offset up to $2500 of the loan balance to save on interest and clear the debt sooner – no early payout fees apply. With all these features,…

GOLD WINNER FLIP TV Unlimited data is the new normal as households stream more than ever This is the first year the NBN has been included in our broadband awards. The rollout has passed the halfway point and once the NBN is in your neighbourhood you’ll have just 18 months before all existing networks are cut off. “The NBN is non-negotiable,” says WhistleOut publisher Joe Hanlon. “Half of the population will need to find an NBN plan in the next year, and the rest of us will have to come across at some point in the next two. Either way, it pays to start looking now.” Another Money first is the introduction of unlimited data. Last year all winners had at least 200GB (the year before that it was 80GB).…

‘Read all the alarmist comments and you’d end up hiding in a cave with a supply of baked beans and water’ Here we are again. The end of another year and time for me to scrape the cobwebs off my highly flawed crystal ball and ponder what may happen in 2018. As I have done each year since Money magazine began, it seems only fair to take a look at what I said last year. For most of us the key issues are likely to be property, shares, interest rates, employment and the Aussie dollar. I’ll give myself about eight out of 10 for my predictions for 2017. Let’s take a look back to what I said in late 2016 about 2017: “Property prices should slow and fall in some…

Australian women work on average 65 days without pay each year, when their salaries are compared with those of their male counterparts. Compounded by the fact that women live longer, and often become the primary caregivers not only for children but for our parents, we are left financially poor. Where I see success in closing this gap there are key steps being taken by women. The first is changing personal stories around money, breaking with traditional social norms of staying quiet and instead celebrating financial success. We all must be loud in our celebration to help shatter the stigma of the “tall poppy” woman. The second is changing the mindset around ambition. Why has it become such a dirty word when associated with women? Ambition is what drives success. The…

With a new year soon upon us (or it might even be 2018 by the time you’re reading this) chances are you’re thinking about making a few resolutions. They might be financial (for example, to spend less money or save more) or they might be health-related (you may want to exercise regularly or drink more water). This app could help you stick to your resolutions. You set up a “habit” (or multiple habits) on the app. It can be anything you like, as it is fully customisable. It’s also flexible so some goals may only be for certain days of the week. You can also set up reminders. You then tell HabitBull how you went and it keeps track for you. There are graphs to show you how long you…

$955 is the average amount each Aussie plans to spend over the holiday season. This includes gifts, entertaining at home, and extra food and drink out. 60% of Aussies don’t set themselves a budget for presents and entertaining in the lead-up to Christmas. Gen Y are the worst culprits. $591 is the average amount each Aussie plans to spend on Christmas presents. At $646, WA residents are the most generous.…

The outlook across emerging markets remains mostly bright, though we do see diverging outlooks as financial conditions likely tighten in 2018 due to stimulus withdrawal by developed markets. Some are sceptical of the sustainability of the current emerging market rally given its credit-driven origins, once again being sourced from China. However, a mix of a deep economic adjustment, ongoing reforms and spreading growth that now includes broad emerging markets as well as Europe suggests a more durable outlook despite some stimulus withdrawal. While China’s debt levels are uncomfortably high, the credit cycle has lasted longer than most had thought possible due largely to the high savings rate. While credit growth cannot sustain at the current pace indefinitely, it can maintain these levels for a while as reforms gradually push the…

Investors now have exposure to greater choices than ever before. Exchange traded funds offer the benefits of a managed fund with the convenience that comes from being traded on the Australian sharemarket. BetaShares Australian Dividend Harvester (ASX: HVST) provides monthly income and exposure to large-cap stocks, and its dividend yield stands out in the market. While the unit price has gone backwards this year, that has been more than offset by the strong yield. The fund comprises about 60% shares from the financial sector and has a strong weighting towards the big four banks. It will be important in the coming year to be mindful of US interest rates. If they rise at a higher than expected rate, then the share prices of some of the top-performing investments are likely…

NEED PAUL’S HELP? Send your questions to: Ask Paul, Money magazine, GPO Box 4088, Sydney NSW 2001 or money@bauer-media.com.au. Sorry, but Paul can’t personally answer your questions other than in the Q&A column. By submitting your question to Money, you consent to having your question and the response you receive from Paul published in the print and digital edition of Money. Raj is feeling the financial stress but ... It’s really a lifestyle decision QI live in Perth. I am 41 years old and earn $121,000, excluding super, in a full-time job. My employer contributes 10% super. My wife is 42, earning $34,000 part time. We have two kids, aged 13 and 17. We migrated to Australia in 2007. Our home is valued at $570,000 with a $400,000 loan. We…

Rather than giving out all the time to your kids, encourage them to join you in the things you want or need to do. You like exercising ... take your kids. You love going out for a coffee ... find a kid-friendly cafe. You need to water the garden ... hand them the hose. You enjoy cooking ... get the youngsters to help in the kitchen. Use your creative powers to get them on board. Or you may want to pay them extra pocket money to help out with special chores. 1. COOL DOWN Relax at the beach or local swimming pool. Meet up with friends or family and their kids so you can catch up with people you care about. 2. GET ON YOUR BIKES Ride out together. Choose…

There’s free money up for grabs, folks. If you earn less than $36,813 this financial year the federal government will give you $500 for making an after-tax contribution of $1000 to your super. That’s a return of 50% right there, just for boosting your own retirement savings. The co-contribution is aimed at helping low income earners lift their super balance. It gives them 50¢ for every after-tax dollar they contribute up to a maximum of $500 a year. Contribute $600 and $300 will be automatically deposited into your super account, once you’ve filed your tax return. “If you are entitled to it you should really consider making the most of it because it’s very generous,” says certified financial planner Jason Andriessen at StatePlus. Eligibility depends on two main tests, he…

This year has had its share of worries – around President Trump, European elections, North Korea, the Fed and the usual talk of a recession in Australia. However, it has mostly turned out well for investors. But can it continue? The cyclical bull market in the direction-setting US sharemarket, at nearly nine years old, and the current US economic expansion, at 8½ years old, are both longer than average, suggesting some vulnerability. And, of course, growth assets such as shares are no longer as cheap as they were a year or two ago. However, there are several reasons to believe that returns will remain reasonable for a while yet. First some context. A typical cyclical bull market in shares has three phases: scepticism, when economic conditions are weak and confidence is…

Putting together the perfect suite of financial products takes time. That’s where this issue comes in. Now in its 17th year, Best of the Best, as Canstar’s Mitchell Watson says, “continues to take the hard work away by awarding and shortlisting the best products available for Australians to consider”. No fewer than seven research houses under the direction of Money’s deputy editor, Maria Bekiaris, were involved in bringing this edition to you. We’ve ranked everything from ETFs and managed funds to super funds, home loans and phone plans. We even find the best wines for under $20. What we hope to bring you are low-cost, great-value products that can help you reach your goals. While past performance is certainly no indication of future returns, what I like about these awards…

GOLD WINNER RUSSELL Risk awareness is key in balancing returns and volatility Russell has continued to dominate this award, as it has for the past few years. Russell Diversified 50 Fund Class A has a 50/50 blend of defensive and growth assets, aimed at investors looking for less volatile returns but with some exposure to growth assets. It has a higher allocation to alternatives (11.5%) than its peers, including volatility strategies, commodity exposures and specialist credit, says Morning-star analyst Elliot Lucas. “Russell’s multi-asset strategies are on a more stable footing in the aftermath of process changes and the completion of the acquisition by TA Associates in late 2015,” says Lucas. “We believe these strategies will serve investors adequately.” Russell Balanced A came equal first, after sharing the top spot last…

GOLD WINNER PIMCO In a tough year, a top team’s rigorous selection process has paid off These funds, which investors turn to when they want to earn more than bank interest, have had a bad year, with only one in the winners’ circle turning in a positive 12-month return. The PIMCO Wholesale Australian Bond fund has taken out this award for the third year in a row. It invests in Australian cash and government, semi-government and corporate securities, aiming to add incremental returns from multiple sources. It also aims to give investors the benefits of a core bond holding, including consistent income and low volatility, which can help stabilise portfolio returns. Distributions are quarterly. The fund has a gold Morningstar analyst rating. “PIMCO Australian Bond remains a leading choice courtesy…

GOLD WINNER ZURICH It’s been a bleak year but performance is more impressive over the longer term Property securities funds, which mainly invest in Australian real estate investment trusts (A-REITs), have turned in a dismal performance over the past 12 months after several years of very strong returns. Zurich Investments Aust Property Securities fund won the category this year after coming second last year. The fund aims to give investors exposure to a range of property securities, including retail, commercial and industrial sectors, providing capital growth and income over the medium to long term. Distributions are quarterly. It has performed well over the longer term, which includes the GFC, providing returns of 7.85% a year to September 2017 since inception in February 2000. This compares with a return of 7%…

GOLD WINNERS ISHARES, SPDR, VANECK AND VANGUARD These are ideal for investors who want low costs, diversification and transparency The gold winners – iShares Core S&P/ASX 200, SPDR S&P/ASX 200, VanEck Vectors Australian Equal Weight and Vanguard Australian Shares Index – benefited from a solid year in the sharemarket. Three of them track the Australian market perfectly, with iShares and SPDR holding the top 200 shares and Vanguard covering more mid-cap stocks by following the top 300. These broadly diversified index trackers are good building blocks for any investor’s portfolio. Funds that invest in Australian shares enjoy the benefits of dividend-paying companies and franking credits. iShares and Vanguard paid out 3.99% and 4.29% respectively to the end of September 2017, while the SPDR dividend was around 4.38% to the end…

GOLD WINNER VANGUARD The low-fee path into listed property promises higher returns for investors The Vanguard Australian Property Securities ETF has won this category for the sixth consecutive year, even though A-REITs came under pressure in the past year. The Vanguard fund gives investors a diversified range of 33 A-REITs spanning the retail, office and industrial sectors and including Scentre Group, Westfield, Goodman, Stockland and Vicinity around Australia and overseas. It tracks the S&P/ ASX 300 A-REIT Index and it had a yield of 3.83% for the year to the end of September 2017. Vanguard reduced its investment management fee to a low 0.23%pa, or one-fifth of the cost for the average A-REIT actively managed fund of 1.25%. This lower fee means bigger returns for investors. After some spectacular double-digit returns…

GOLD WINNER COMMSEC Strong support and a range of tools help investors spot opportunities and make the right decisions Australia’s biggest online broker, CommSec, has taken out this award for 11 years straight. “CommSec has continued to set the standard for the best feature-packed online broker award with its internet-preferred online share-trading platform,” says Emily Horton, research analyst with Canstar. In judging the award Canstar considered more than 100 features. “CommSec provides support and tools to assist traders, with a strong market information offering including daily market reports, live quotes, buy/sell signals, company financial reports, company news and announcements, economic research and forecasts, and technical analyst reports,” says Horton. Customers can access real-time updates and live charting tools that can be organised into a personalised watch list to help them…

Q WHAT CAN AUSSIES EXPECT FROM THEIR SUPER FUNDS NEXT YEAR IN TERMS OF VOLATILITY AND RETURNS? Over the year to June 30, 2017 strong returns boosted the balances of many superannuation accounts. However, a more challenging investment environment characterised by subdued returns and increased volatility is expected to impact super returns over the next year. The average balanced fund (funds with an allocation to growth assets ranging from 60% to 76%) achieved a return of 10.4% in 2017. The trend towards overseas shares was a key contributor to returns due to buoyant international equity markets. The top performers also tended to have higher exposures to unlisted assets such as direct property and infrastructure. The top-performing balanced fund for 2017 was Hostplus Balanced, delivering 13.2%. Over the next 12 months…

GOLD WINNER AUSTSAFE SUPER International shares, particularly in emerging markets, provide the winning edge AustSafe Super’s winning growth investment option has been boosted by strong performance from its international shares, including emerging markets, and from property, unlisted infrastructure and small-cap Australian shares. AustSafe was originally set up for rural and regional Australians but the $2 billion fund is open to the public. It has 110,000 members and turns 30 in 2018. AustSafe’s asset consultant, JANA, favours an active approach, rather than passive or index management. The fund has 89% in growth assets, with 34% in Australian shares, 14% growth alternatives, 7% infrastructure and 10% property. The growth option had upped its asset allocation to overseas sharemarkets (34% of the portfolio), a smart move as the US market continues its record…

GOLD WINNER HOSTPLUS Low fees, achieved by investing in index funds and cash, mean higher returns The Hostplus Indexed Balanced option, with its ultra-low 0.06% annual investment management fee, wins for the sixth consecutive year. Hostplus also keeps its administration cost low at $1.50 a week, totalling $78 a year, which is unchanged since 2005. It is one of a small number of funds that charge a flat admin fee; most have an asset-based fee. Hostplus invests in a range of low-cost index investments such as the Macquarie True Index Australian Fixed Interest Fund (7.5% of the portfolio), the BlackRock Fission Indexed International Equity Fund (hedged and 20% of assets), IFM’s enhanced passive Australian shares (35%) and an indexed global equities strategy (unhedged and 20%). Citigroup manages the fund’s high-interest…

GOLD WINNER SUNSUPER A sign-up bonus, plus a range of investment options, will appeal to retirees Features of the Sunsuper for Life Income Pension include a lifecycle option and a bonus for signing up. Pensioners can choose from a range of investment options or opt for the “Today and Tomorrow” strategy so they don’t have to think about changing it. This pays an income from the cash investment option (which holds around two years’ income) while the rest stays in the retirement option. When the cash runs out the income is paid from the retirement account. There is a signing-up bonus for members who activate the income account but to qualify they need to have been with Sunsuper’s saving account for at least 12 months. The bonus is 0.3% of the…

GOLD WINNERS BANK AMP NON-BANK AUSTRALIAN UNITY Three linked “piggy banks” can help you manage your finances Plenty of savings accounts work by paying the highest rate when regular deposits are made but AMP’s Bett3r savings account takes things one step further. Bett3r (pronounced “better”) is named after the three linked accounts that are earmarked for paying bills, saving and spending. To earn the top rate, you’ll need to deposit at least $2000 each month into the “pay” account, for example your pay. This account also picks up an innovation award (page 122). Australian Unity’s Active Saver pays bonus interest of 1.7% when you deposit $250 each month and don’t make any withdrawals during the month. At the time of writing, the top rate on this account was 2.9%, though…

GOLD WINNERS BANK UBANK NON-BANK FIRSTMAC A loyalty bonus will help your savings grow even faster if you roll them over If you’re concerned about dipping into your savings, or you believe market interest rates could fall, a term deposit can be an ideal way to put your spare cash to work for a set return. UBank, the online arm of NAB, requires a minimum of just $1000 to open a term deposit, and it comes with the sweetener of a loyalty bonus. When your UBank term deposit matures, simply roll over the full amount to another UBank term deposit and earn an extra 0.10% interest. It pays to make a note of when your term deposit will mature. Unless alternative instructions are provided, many banks, including our second placegetter…

GOLD WINNERS BANK POLICE BANK NON-BANK NORTHERN INLAND CREDIT UNION A carefully chosen deal can help you get on top of your debt sooner A balance transfer deal can provide valuable breathing space to clear an outstanding debt free from the burden of interest charges. A common misconception is that you won’t pay any interest at all during the balance transfer period. But any new purchases typically attract the regular card rate. In addition, if you don’t clear the sum transferred in the given period you could be hit with the much higher interest rate that applies to cash advances. So choose the balance transfer period with care to be sure you can clear the debt in the zero-rate (or low-rate) time frame. Police Bank’s balance transfer offer combines a…

GOLD WINNERS BANK G&C MUTUAL BANK NON-BANK NORTHERN INLAND CREDIT UNION If you’re carrying over a monthly debt, a low rate and low fee are important Across all financial products there can be few that have such a wide variation in costs as credit cards. At the top end of the scale, some cards charge interest rates of more than 20% a year and when it comes to the annual fee it’s possible to pay as much as $700. At the budget-friendly end of the spectrum, our winners offer very low rates and in some cases no annual fee. If you carry a card debt from month to month – you’re what is known in the industry as a “revolver” – it makes good financial sense to stick with one…

GOLD WINNERS BANK BANK OF SYDNEY NON-BANK REDUCE HOME LOANS If you’re buying a property, make the most of the ultra-low rates while they last The Reserve Bank may have left the official cash rate at a record low of 1.5% in November but there’s still a massive 2.28% difference between the cheapest and dearest variable rates on Canstar’s database. The cheapest, courtesy of our non-bank winner Reduce Home Loans, has an advertised rate of just 3.39%. The dearest, which you won’t find in these awards, is 5.7%. Queensland-based Reduce has picked up the top award for the third year in a row. Its Rate Buster standard variable loan allows unlimited extra payments and redraws (but repayment frequencies are only monthly or fortnightly). Borrowers who maintain a good repayment history over…

GOLD WINNERS BANK QBANK NON-BANK SCU A host of extras makes this low rate an even better deal (so long as you qualify) Q Bank’s fixed-rate home loan brings plenty of extras to the table. Additional repayments can be made, up to $10,000 annually to a maximum of $30,000 in any fixed-rate period, with fee-free redraw available. As a bonus, QBank offers a 10% discount on home and contents cover and borrowers can save up to $900 on the standard QBank valuation and legal fees. Do note that QBank does have membership restrictions. Police and ambulance officers, firefighters and health workers, emergency service workers, correctional service officers and government employees as well as their family members are eligible for QBank home loans. The SCU fixed-rate loan lets home buyers borrow…

GOLD WINNER HEARTLAND SENIORS FINANCE Retirees can tap into the equity in their home to help fund their dream lifestyle Home ownership gives retirees the security of a roof over their head but the downside is having significant wealth tied up in the family home – it’s money that could be used to see seniors through their later years. Downsizing to a smaller place may seem like a simple solution to the asset rich/cash poor dilemma but it’s not always the quick fix it appears to be. Research by National Seniors Australia finds many seniors regard the process of downsizing as confusing and costly and involving too much personal and financial upheaval. That’s when a reverse mortgage can offer a relatively low-stress means of tapping into home equity to free…

GOLD WINNER AMP ‘Bucket’ accounts can help cut spending and boost savings You’ve probably heard about the “bucket” system for budgeting where you separate your money into different buckets for different purposes, for example a bucket for spending and another for saving. Well, that’s the idea behind the winner of our Best Innovative Banking Product, AMP’s Bett3r account, which is designed to make the bucket system easy to manage. The account also picked up an award for Best Savings Account – Regular Deposits (see page 96). There are three linked bank accounts – Pay, Save and Spend. “This lets customers set up their finances so that, first, any necessary costs – like rent, home loan repayments or utility bills – are taken care of. Then funds are allocated toward any…

GOLD WINNER AUSBBS If the NBN is on the way, an affordable, short-term contract provides flexibility With the NBN rollout reaching the midway stage across Australia, that still leaves half the population needing an ADSL broadband connection until 2020. All of our winners operate without contracts. There are certainly great deals available for those willing to commit to 24 months but we’ve opted to only include month-to-month contracts (or 30-day recharges) should you need to switch to the NBN any time soon. With unlimited broadband for just $55 a month, our winner is AusBBS’s On-Net ADSL Unlimited plan. Including Telstra line rental, this bundle offers affordable call rates: 20¢ local calls, 27¢ a minute to Aussie mobiles and $1.90 a minute international. Our more chatty readers might consider MATE Communicate,…

I’m a 41-year-old female from Newcastle. I am writing to thank you for making a huge difference to my life. I grew up in an average home. My parents struggled financially most of the time; they both were very uneducated but hard working. I started watching the Money TV show when I was around 14 years old and decided then and there that I would make my life different and never struggle for money. So while working at Woolworths on the weekends I saved 50% of my wage and paid cash for my first car at 15 before I could even drive it. I saved a deposit for a house by 20 and bought an investment property at 22. Fast-forward to today and we own our dream home outright, have…

Banks will be required to share information about your late payments on loans and credit cards with other lenders, under a proposal from treasurer Scott Morrison. This is part of a reform known as “comprehensive credit reporting”, and it’s likely to create more problems than solutions. Before these reforms, the only information on credit reports was “negative” information, such as defaults on credit contracts, legal judgments and bankruptcy. Since 2014, lenders have been able to share more comprehensive information, including credit limits, credit types and late payments. Late payments, known formally as “repayment history information”, can be listed if you make a repayment more than 14 days after the due date. When it was implemented in 2014, sharing this information was optional for banks and lenders. Morrison wants to make…

BankVic has introduced a new first home buyer package, which allows members to borrow up to a 85% loan-to-value ratio (LVR) without lenders mortgage insurance (LMI). A family guarantee is also available. The rate is a competitive 3.79%pa and there are no initial, monthly or annual fees. The package comes with a credit card with a rate matched to the home loan. The first 100 eligible members will also get a $5000 grant. Westpac is offering customers a new wearable payment option, PayWear, which it says will be available in early December. It includes a silicone band and a “keeper”, which can be attached to an existing watch or fitness band and contains a microchip linked to the customer’s everyday transaction account. Customers can use the device to tap and…

True to the seasonal spirit of goodwill, now is the time when charitable giving reaches its peak. Of course, giving to a worthwhile cause is primarily motivated by the desire to do good but it doesn’t hurt that there can also be a tax benefit! Provided you’re giving to an organisation that is registered as a deductible gift recipient (DGR), and you are donating $2 or more, you can claim a tax deduction. Most major charities are DGRs but if you’re not certain you can check on the deductible gift recipients page (under tools and resources) at abr.business.gov.au. You’ll need a receipt to substantiate the deduction. If you used the internet or phone to make a donation over $2, your web receipt or credit card statement can be used to…

The housing market is likely to record moderate price rises in 2018. SQM Research’s base-case forecast is for capital city dwelling prices to rise by 4%-8%. The rate of price increases will be slower in 2018, predominantly due to a slowdown in the Sydney market, which should continue into the first half of the year. Melbourne’s property market will also lose some momentum; however, this will be relatively modest. There will be first-year property market recoveries for Perth and Darwin and an ongoing real estate boom in Hobart, which is set to record the highest level of accelerated price growth of any capital city next year at 8% to 13%. Brisbane will experience slightly stronger gains than those posted in 2017. However, the persistent overhang of surplus listings will hold…

High fees can really eat into your returns but you might be surprised by just how much. The 2017 Stockspot Fat Cat Funds report, which rates funds based on how they have performed after fees relative to their peers, found that 521 funds of the 4100-plus analysed were “fat cat funds”, which means that they performed worse than their peer group over one, three and five years and underperformed by more than 10% over the entire period. On a positive note, 587 fell into the “fit cat” category, which means they have beaten their peer group over one, three and five years and by more than 10% over the entire period. The remaining funds fall somewhere along the scale as fine cat, fair cat or flabby cat. Those trapped in…

There are good reasons for optimism at miner South32. Recovering steel prices have helped lift manganese, metallurgical coal and nickel prices while a surge in aluminium prices promises riches ahead. This will all mean sensational profits for the miner, which is already buying back shares aggressively and is likely to pay a fat dividend this year and next. With a cash balance of almost $US3 billion ($4 billion) and over $US2 billion in free cash flow expected, the surging share price would appear to be well deserved. That is exactly why we should now sell. We bought South32 because it was unloved and under-earning. That’s changed: now it is neither maligned nor profitless. The time to buy is when profits are miserly and enthusiasm is spent. Today profits are bountiful…

My husband and I (both aged 28) have a mortgage of $250,000 (on a house worth $510,000). We have two kids and may have more. We live on one wage of $80,000. We have no debts (besides HECS-HELP) and have $15,000 in shares. What should we do now? Should we buy an investment property or pay down the mortgage or buy shares? Ideally I'd like to buy an investment unit or house on the Sunshine Coast in Queensland. Justine It really interests me to read questions from Money readers such as you, Justine. It keeps me in touch with such a broad range of age groups and real-life situations. My first thought is to go back to when Vicki and I were first married and in the young-kids stage. We…

Real estate investors who ignore commercial real estate are missing out on the attractions of a large part of Australia’s property market, including higher rental yields than are available from residential property. This makes it especially attractive for people who live off investment income, such as retirees. Indeed, my best-performing investment for the year to September was the Charter Hall Direct Office Fund, which returned 21.3%, including a dividend yield of 6.7%. This fund is open to new investors (see charterhall.com.au) Overall the unlisted sector produced total returns of 12.3% in the year to September 2017 as measured by the Mercer/IPD Australian Property Fund Index. Three-year returns were 11.8%pa and five-year returns 10.6%pa. Many shy away from commercial property because they think it’s just too much hard work and too…

We have just been through the results season for the banks that have a September year-end, which include the majors, ANZ, Westpac and NAB. CBA had a quarterly update but has a June year end, so its results are out of step with the rest of the banks and won’t be known until February. None of the major bank results have impressed anybody. The banks have truly turned off the growth engines as they focus on cutting costs and building capital. NAB, for instance, announced 6000 job losses and a provision of $500 million to $800 million to be taken in the first half of next year. They all maintained, rather than increased, dividends. The sector is now factoring in low, or at least no significant, growth, with dividends growing…

Q WHAT WILL BE THE STANDOUT SECTORS AND WHAT ISSUES DO INVESTORS NEED TO WATCH OUT FOR? We see 2018 as a year of transition, away from the prolonged low-interest-rate environment that has only managed to support a debt-fuelled, overinflated housing sector and towards an environment of steady, broad-based growth. It has been quite some time since a changing interest rate cycle has come into play for guiding investment choices. We see global growth being more supportive for Australia than at any time since the GFC. The US and Europe are expanding at an above-trend pace, the UK so far has avoided the worst of the Brexit-related fears of a protracted slowdown, and China has been expanding at a steady 6%-7% pace since 2014, in turn underpinning the strongest regional…

GOLD WINNERS GREENCAPE AND MACQUARIE Stock pickers with an eye for quality lead the field in the performance stakes This category always has a big field of winners and placegetters and this year three funds tied for first place, including one of last year’s winners, Greencape Broadcap. The other winning funds are Greencape High Conviction, which was equal second last year, and Macquarie High Conviction. Greencape Broadcap invests in a portfolio of 25 to 70 high-quality stocks that reflect the managers’ best ideas from large, mid and small capitalisation stocks. “Greencape Broadcap’s expert investors are highly adept at uncovering and acting upon investment opportunities on the back of unwavering and creative research,” says Morningstar analyst Tim Wong. “Founders David Pace and Matthew Ryland are among the best stock pickers in the…

GOLD WINNER PIMCO A diverse global approach provides investors with regular returns Global fixed-income funds have performed better than their domestic counterparts over the past 12 months. For investors who are seeking regular returns over the long term they are a valuable addition to a portfolio. PIMCO’s Wholesale Global Credit fund has won this award for the second year in a row. The fund has a silver analyst rating from Morningstar. It typically contains a sizeable chunk of investment-grade corporate bonds, but exposures to securitised instruments and emerging markets have also been meaningful at times, says Morningstar analyst Tim Wong. “PIMCO Global Credit is a superior choice on a number of counts. The quality and depth of its personnel and rigorous approach to identifying and building a portfolio of credit…

GOLD WINNERS BENNELONG AND NOVAPORT Skilled teams find the growth opportunities outside the big names on the ASX After performing well for several years, small companies funds had subdued returns over the past year. Our joint winners are Bennelong ex-20 Australian Equities and NovaPort Smaller Companies. Bennelong taps into the investment potential that lies beyond the largest stocks, where it says there’s generally greater diversification and a broader opportunity set. It can be used as a complement to a more top-heavy portfolio, or alone as a diversified exposure to the Australian market. It typically holds 20 to 40 stocks and has a large and mid-cap tilt, says Morning-star analyst Matthew Wilkinson. “The high-conviction Bennelong ex-20 Australian Equities is a top pick for those investors seeking ex-20 exposure,” he says. “With…

GOLD WINNERS ISHARES, MAGELLAN AND VANGUARD US sharemarket’s bull run underpins an impressive performance The three international share ETF winners have captured the US sharemarket’s bull run and scored impressive double-digit performance. The winners include two ultra-low-cost, highly diversified index share funds, iShares S&P 500 and Vanguard US Total Market Shares, as well as an actively managed product, Magellan Global Equities. Twenty-five per cent of the iShares S&P 500 ETF is invested in information technology companies such as Apple, Microsoft, Amazon and Facebook, a sector that is largely missing from the Australian sharemarket. It also gives exposure to healthcare and pharmaceutical companies. While iShares gives you exposure to the top 500 US stocks, or around 80% of the US share-market, the Vanguard fund gives you the entire US stockmarket, encompassing…

GOLD WINNER COMMSEC The leader in a competitive field provides all the right tools for investors For the second year in a row CommSec has taken out the top award in this category. “CommSec has been able to widen the gap between them and their competitors, taking over as market leaders for adviser and direct client services,” says Emily Horton, research analyst with Canstar. “They have done this through providing comprehensive market analysis and commentary.” CommSec’s competitive product offering provides tools that help in monitoring portfolio performance with, for instance, the inclusion of access to loan statements, margin call notifications, online summaries and industry research, says Horton. ANZ, a previous winner of this award, came second, as it did last year. It offers customers who hold at least four stocks…

GOLD WINNER SELFWEALTH TRADING You can afford to think big ... the size of the order doesn’t matter when it comes to buying and selling at a rock-bottom price The new market entrant SelfWealth Trading has taken out the top award, offering the lowest flat-rate brokerage fee regardless of the size of the trade. “SelfWealth is particularly suited to investors trading in high quantities,” says Emily Horton, a research analyst with Can-star. “It allows investors to trade shares at a competitive price relative to other full-service and online brokers, with a flat fee of $9.50 irrespective of trade size. It doesn’t charge any brokerage commission on trades, and it’s free to set up a trading account.” Investors who want to also access tools to help them reach their target portfolio…

BEST SUPER FUND MANAGER GOLD WINNER SUNSUPER SCOTT HARTLEY CEO, SUNSUPER BEST PENSION FUND MANAGER GOLD WINNER SUNSUPER We are now three years on from the introduction of MySuper, the low-cost default product that each fund is required to provide, and it has continued to put downward pressure on fees across the industry. However, a focus on fees and costs does not always drive the strongest member outcomes, so it is important to take a holistic view of your super and consider the outcomes achieved once fees, costs and investment earnings are applied. But comparing funds can be an overwhelming task given the large number of them. This is compounded by the fact that most offer multiple investment options, which have different objectives, asset mixes and returns. It’s no wonder…

GOLD WINNER CATHOLIC SUPER A big holding of defensive assets reduces the risk of negative returns Catholic Super’s Moderately Conservative fund, with a low level of volatility and modest risk of negative returns, wins our award this year. The $7.3 billion fund has a 45-year history. It expects to have two to three negative years in every 20, compared with three to four years for a balanced fund. It currently has 53% invested in defensive assets and 47% in growth. Growth assets include Australian shares (16%), international shares (16%), property (9%) and alternatives (6%). It has 19% in cash, 21% in fixed interest, 10% in defensive alternatives and 3% in infrastructure. But the trade-off for lower risk is lower returns over the long term compared with options that hold more…

GOLD WINNER LOCAL GOVERNMENT SUPER Investing is not just about the returns – an ethical approach pays off in other ways This year’s winner, Local Government Super, is highly committed to managing environmental, sustainable and governance (ESG) risks, believing it is in the best interest of fund members and their returns. What sets LGS apart from other super funds is that its entire $10.3 billion in assets is invested along ESG lines, using measures such as negative screening of companies involved in tobacco, gambling, armaments, old-growth forests and high carbon-sensitive sectors such as coal mining. For example, LGS’s international equities have screened out 225 companies (equating to 10%) of the MSCI All Country World Index, a strategy that has delivered 0.07% annual outperformance over the past three years. It has…

GOLD WINNER VICSUPER Robo advice helps fund members stay on track to achieve their goals VicSuper has picked up an award for its online free advice service, Beeline. Beeline gives its fund members an interactive personalised dashboard with real-time data linked to their VicSuper account. Beeline aims to keep members engaged about whether they are on track to reach their target income for retirement. It helps them set their goals and provides a range of important tools for budgeting, contribution adjustment, investment options and retirement adequacy advice to accumulate wealth. Beeline’s robo advice coaches members with motivational messages and rewards them with badges for activities. It also nudges and prompts members through other communication channels to take the next steps. Beeline also incorporates information for the member’s spouse so that…

GOLD WINNERS BANK ME BANK NON-BANK CUA Fee-free ATM access is supported by a bonus interest rate and special offers The decision by Australia’s four biggest banks to scrap withdrawal fees at their own ATMs has created a more level playing field among everyday accounts. But ME Bank’s Everyday transaction account, which took out the award last year, goes a step further on fee savings with account holders enjoying free access at over 3000 ATMs. And if you use any other Australian ATM, ME will refund the ATM fee within 30 days. The Everyday account comes with a “Buck” Mastercard. Account holders can also choose a pink debit card, which will see ME donate 1¢ to the National Breast Cancer Foundation for each purchase. Both debit cards provide access to…

GOLD WINNERS BANK HUME BANK NON-BANK SELECT ENCOMPASS CREDIT UNION Good habits developed early in life can really pay off later Hume Bank’s Clancy Koala S2 account has everything children need to develop good savings habits from an early age with features that are simple enough for youngsters to grasp. The account is fee free and children can earn 2.75% bonus interest if they deposit just $10 a month (that’s a mere $2.50 in weekly pocket money) and don’t make withdrawals in a single month. If these conditions aren’t met for that month the rate falls to the base of 0.01%. There are no account fees, and deposits can be made in a branch, online or through a school banking program. Best of all, mums and dads can monitor their child’s…

GOLD WINNERS BANK TEACHERS MUTUAL NON-BANK FIRSTMAC Young savers can begin their financial journey with just $500 A fixed-rate deposit of 12 months or more can be handy if you’re saving for longer-term goals such as buying a first home. Some economists expect the Reserve Bank’s cash rate to rise this financial year. If that happens, locking in for 12 months could mean missing out on a higher return. A possible solution is to spread your savings over various terms. Teachers Mutual gives customers the option of becoming a bank member for $10, and for members up to the age of 24 or new members it takes just $500 to open a term deposit – half the minimum that applies to existing members and non-members. If you have a teenager…

GOLD WINNERS BANK HSBC NON-BANK COLES Cardholders enjoy a range of perks, from free insurance to cheaper groceries When it comes to value-packed rewards cards, the non-banks come up trumps. The HSBC Platinum card provides one point for every $1 spent on eligible domestic purchases and two points on international purchases up to 10,000 points per statement period. Points can be redeemed for shopping, travel and merchandise rewards, and cardholders can also take advantage of HSBC’s Home&Away Privilege Program for savings on travel and other purchases. The card’s complimentary insurance covers travel, extended warranty and purchase protection. The Coles Rewards Master-card notches up two points per $1 spent, no matter where you shop, rising to three points per $1 spent at participating flybuys outlets such as Coles, Kmart, Target and…

GOLD WINNERS BANK BANKWEST NON-BANK SCU As well as low cost, flexibility and ease-of-use are important features Bankwest tops the bank category, while its extensive branch network will appeal to owners operating businesses that involve cash transactions, such as bars and restaurants. That said, if you’re increasingly travelling overseas to meet clients or suppliers, most business transaction accounts will slap you with overseas ATM transaction fees and a foreign exchange charge, usually around 2.5% of the transaction amount. If you need a cash buffer for tax time, it might be worth considering earning some interest where you can get it. With Citibank’s Ultimate Business Saver, if you’re holding a balance above $10,000, you can earn 1.65% on your money. If you’re seeking to trim your accounting costs, non-bank SCU lets you…

GOLD WINNERS BANK BANK OF SYDNEY NON-BANK AUSTRALIAN UNITY If you’re an owner-occupier, good things come in cheap packages When a bank wins an award for the second consecutive year it’s obviously doing something right, and that’s certainly the case with Bank of Sydney’s Expect More variable PAYG package for owner-occupiers, which also took out the top spot in the 2017 awards. The package includes a 100% offset account, zero annual fees on a Bank of Sydney credit card (the bank is currently in the process of switching from Visa to Mastercard) and fee-free redraw. Up to $400 in lender’s legal fees and $330 in valuation fees are covered by the bank. The real hero of the Expect More package is the rate discount. At the time of writing, a…

GOLD WINNERS BANK UBANK NON-BANK AUSSIE The ability to make extra repayments is a bonus for investors Fixing your loan rate doesn’t just provide certainty over cash outgoings. For investors, it can also be an opportunity to prepay loan interest for up to 12 months – a strategy that can be used to boost tax deductions in a year when income from other sources is higher than normal. The downside of fixing is that these loans tend to be less flexible than variable rate loans. However, UBank’s five-year fixed UHomeLoan for investors, which also took out this award in 2017, allows up to $20,000 in additional repayments during the term. There are no application fees but a $395 rate-lock fee applies. The maximum borrowing is 80% of the value of the…

GOLD WINNERS BANK POLICE BANK NON-BANK LIBERTY FINANCIAL As well as the interest rate it’s worth looking at any extra features Personal loans are one area where the mutuals – credit unions and building societies – have traditionally offered a better deal than banks. The rise of smaller, member-owned banks (many being former mutuals) is changing this but for this year at least the mutuals continue to hold the lead for the cheapest personal loans. Police Bank won in 2017, and it’s no surprise it’s back for an encore performance. Its personal loan comes with pre-approval and no early payout fee. It can be used to consolidate debt, and borrowers can apply online to have their loan topped up. Among the non-banks, Liberty Financial’s Personal Best loan comes with a…

GOLD WINNER NAB The case of the mysterious transaction can be easily solved Chances are at some stage you have spotted a transaction on your account but have no idea who and what the company actually is. NAB says it receives a significant volume of calls related to transaction queries with customers often feeling confused and anxious when they make a purchase in store with a merchant they know and trust but see an unfamiliar business name in their transaction history. A quick Google search could also solve the mystery but NAB’s “Look Who’s Charging” feature on its mobile banking app makes identifying the source even easier. You simply need to tap on the transaction on the app and you are able to easily view details such as the trading…

STOCARD OS: IOS AND ANDROID Want to ditch that pile of loyalty cards filling up your wallet? The Stocard app lets you scan the barcodes on loyalty cards for a long list of Australian retailers, including Woolworths Rewards, Priceline, Myer and Spotlight. It also shows you offers, coupons and catalogues for your cards. STUFF YOU SHOULD KNOW, ITUNES This US-based podcast on “how the world actually works”, hosted by Chuck Bryant and Josh Clark, digs into a range of personal finance topics, including sin tax and budgeting. It also looks at concepts such as stoicism and internships. The podcast is rated 4.5 stars on iTunes. GETPRICE.COM.AU This site allows you to compare prices of 3.5 million products from more than 1200 shops. You can sign up for the GetPrice e-newsletter,…

GOLD WINNER JEENEE MOBILE If home broadband is down or just slow, there’s a convenient backup Mobile broadband remains the most neglected of internet offerings. These days people choose data-only plans when they can’t get a fixed line connection where they live, want a backup (when struggling with home internet) or for travelling around Australia. Plans also suit those looking for transportable data for work or study. With 10GB for $25 a month, Jeenee Mobile’s $25 Data SIM plan takes top billing, at a cost of $2.50 per GB. To put that into perspective, you can expect to use 120MB an hour on Facebook, or about 2.5GB a month. Vaya and OVO, second and third, both offer 15GB for $39 and $39.95 respectively. And all plans are BYO modem. Obviously,…

GOLD WINNER SPINTEL Even with unlimited domestic calls and texts, this telco keeps the costs down Considering our national average for data consumption (2.2GB a month) most of us will fall into the bracket of average usage. That is, someone using their device for daily calls, text, email and apps, including music streaming, instant messaging and social media. Money has had to increase the monthly data allowance in this category, going from 2GB last year to 5GB. But will that suffice? “5GB will do most people with ease,” says Joe Hanlon from WhistleOut. “Providing you’re not a heavy video user or constant live-streamer, 5GB is just enough to allow most of us to operate a wide range of applications with confidence and without the fear of racking up huge bills.”…

GOLD WINNER MOOSE MOBILE Our love affair with the smartphone means data allowances have to keep increasing Australia’s smartphone mania keeps growing. We are currently the fourth largest nation of smartphone owners globally, according to the latest Deloitte Mobile Consumer survey, at an estimated 84%. Collectively, we interact more than 480 million times a day with our mobiles, with up to a quarter of us feeling “addicted” to our phone. “These days only a small section of the population use their phones purely for calls and texts. Most of us are on smartphones, using data-led applications, for much of the day and well into the night,” says Joe Hanlon, publisher at telco comparison website WhistleOut. “Having a data pack that allows for that sort of access wherever and whenever you…