Employer super contributions must in pooled investments first. Which is the best until moving to direct invest?
For context this is for Australia Super, but could equally apply to other super funds.
Employer super contributions must be paid into the pooled investments first, before we can move them into member direct. To minimise brokerage costs, I'm thinking of quarterly moving those contributions into member direct. To remain exposed to the market on the pooled side, it would be ideal for these contributions to be kept in the Australian shares or International share options while they wait to be moved to member direct. Those options have zero transaction fees in Australia Super and zero buy/sell spread.
However, pooled investments have tax provisioning built into them. Is this a 'hidden' transaction cost? Or does it only reduce any gains actually earned?