# Understanding buy-sell spreads

What's a buy/sell spread?

As a TelstraSuper member, you have the ability to make proactive decisions about your super, including switching your investment options and making contributions and withdrawals (where eligible).

When initiating a contribution, investment switch or withdrawal, you're effectively buying and/or selling investment units, similar to how you'd purchase and sell shares in a company.

The buy and sell prices of a particular investment option may differ as a result of the variable costs associated with buying or selling units and any underlying securities or assets.

The difference in buy and sell prices (which is the aggregate of any buy cost and sell cost) is the buy-sell spread.

### How transaction costs are applied to your account

The buy-sell spread is not directly deducted from your account, but is an additional cost to you that's reflected in the unit price. This will therefore affect the number of units you're able to buy or sell.

Please note TelstraSuper’s buy-sell spread is often 0% in which case you wont be charged for initiating the transaction. Please see the Additional Information About Your Super Guide for current figures.

#### Example: Member contribution

When you make a contribution you buy units in an investment option. The buy-sell spread is calculated by adding together the buy and sell costs. We do this because whenever you see your statement or look at your details in SuperOnline, we display the sell price so that you know how much your investment is worth at that point in time, net of the buy-sell spread.

Using the following example of a \$50,000 contribution in the Property option where the buy-sell spread is 0.10% - buy price is \$1.0010 and the sell price is \$0.999, the total cost is determined as follows:

 Cost Calculation Initial Contribution (already at sell price) No. of units purchased (contribution / buy price) Current balance (current no. of units x current sell price) Total buy-sell charge (initial contribution - current balance) \$50,000 \$50,000/\$1.0010  = 49,950.05 \$49,950.05 x \$0.999 = \$49,900.10 \$50,000 - \$49,900.10 = \$99.90

Therefore, when you make a contribution of \$50,000 into the Property option, the actual value of your investment that you will see will be \$50,000 - \$99.90 = \$49,900.10.

#### Example: Investment switch

For an investment switch the calculation is slightly different as the buy-sell costs may be different for each investment option. Following is an example of a \$100,000 investment switch from Balanced (where the \$100,000 will already be displayed at the sell cost) to Property. The buy-sell spread is 0.10% - buy price is \$1.0010 and the sell price is \$0.999, the total cost is determined as follows:

 Cost Calculation Switch amount (already at sell price) No. of units switched in (switch amount/buy unit price) Current balance (current no. of units x current sell price)  Total buy/sell price (initial contribution - current balance) \$100,000 \$100,000 / \$1.0010 = 99,900.10 \$99,900.09 x \$0.999 = \$99,800.20 \$100,000 - \$99,800.20 = \$199.80
Therefore, when you make an investment switch of \$100,000, the actual value of your investment that you will see will be \$100,000 - \$199.80 = \$99,800.20.

#### Setting the numbers

The buy-sell spreads applied to our investment options are estimates only, and reviewed on a regular basis to ensure they reflect up-to-date costs of acting on member initiated transactions. Current figures are published in the Additional Information About Your Super Guide.