Spaceship's annual fees are twice that of non-profit industry funds while their stated return target of 2.5 per cent above the consumer price index is well below other comparable super funds. The current inflation rate implies a 4 per cent annual return. A comparable Australian super product targets 3.85 per cent above inflation.

Portfolio reflects what's feasible

"If you are young you can take more risk in super but you would expect a higher return to go with the extra risks," Mr Rice said.

The fund told prospective investors it would have more than 90 per cent invested in equities, with 34 per cent tech stocks, and the remainder mostly Australian shares. The largest single stake would be in Google, followed by Apple and the Commonwealth Bank.

Founder and chief executive Paul Bennetts said the portfolio reflected what was feasible from a standing start, but would "evolve quickly over 2017". Spaceship, he said, was close to making its first private technology company investment in the second quarter.

The conservative 2.5 per cent target, understood to be set by the fund's asset consultant, is based on their views of equity markets and the economy, and may be revised.

Spaceship will charge an annual indirect cost ratio fee of 1.6 per cent, or $878 per $50,000 balance.

SuperRatings chief executive Adam Gee said the fees were significantly higher than those charged by the median super fund.


He also noted that the portfolio's allocation to growth assets was very aggressive in comparison with the fund's conservative return target.

But Mr Cannon-Brookes, who was named The Australian Financial Review's Business Person of 2016, backed Spaceship's fees, which he said were more expensive than a traditional super fund but less than a venture capital fund.

Digital marketing campaign

"Long term they will be judged on absolute results and they know that clearly," he told The Australian Financial Review on the sidelines of the The Australian Financial Review Business Summit last week.

Mr Cannon-Brookes, who is an investor in the venture, is central to a sophisticated digital marketing campaign, featuring on the website and in online advertisements.

"They have come out of the gates awesomely but, if that pool gets to a billion or more, they potentially get the returns to scale that allows them to be a better fund with lower administration costs."

Mr Cannon-Brookes, who will put some of his own super money in Spaceship, also allayed concerns about the risks of betting big on tech.

"The way the super rules are you can't go find a bunch of tiny start-ups and gamble your entire super on some random one in a 100 company," he said.


"They are taking higher risk, yes, but well within a framework that limits risk because it's retirement savings."

Superannuation funds are governed by the Australian Prudential Regulation Authority and are required to meet investment risk, governance and liquidity requirements to hold a license.

Life insurance

"There's a view that, for a young person having that asset exposure – almost 100 per cent – in the early years is the way to go," said a superannuation policy expert who declined to be named.

Another concern among advisers is the fact that many who switch to Spaceship will be giving up life insurance, which is a requirement of default plans.

Mr Rice said no insurance was "fine for people who don't want it". "But what if you get married, have kids and then want insurance. You will have to go somewhere else for it."

Mr Bennetts said the fund would be launching an insurance offering this year and expressed his frustration that many young Australians with multiple super accounts were having their balances eroded by insurance premiums.

Mr Bennetts, Andrew Sellen, Dave Kuhn and Kaushik Sen raised $1.6 million last September from tech identities such as Mr Cannon-Brookes and Aconex co-founder Leigh Jasper to establish Spaceship.


Private individuals, some of whom are involved in financial markets, also invested the venture.

Spaceship's seed funders are backing the marketing and customer acquisition prowess of the founders to snare a growing share of the $2 trillion super pool by luring young savers to the fund.

The fund has drawn on many of the tactics used by fast-growing, venture capital backed digital businesses, such as promoting its product on social media, courting press in online publications, and encouraging keen investors to refer others by bumping them up a "waiting list".

Engaging young customers

The fund has also hosted meet-ups for interested investors, and sells socks, T-shirts, stickers and bookmarks on its website.

Many in the superannuation industry have been impressed that Spaceship has engaged with young customers, who are usually uninterested in financial services.

As regulation has made it easier for members to switch superannuation funds, the power of marketing will become an increasingly powerful factor in attracting funds. "It's been very hard to move your super, now theoretically it's really easy," Mr Cannon-Brookes said.

"It should happen in three days. The same thing happened in the mobile industry. This is good for consumers but you need people to take advantage of it."


But Spaceship's marketing tactics have also raised eyebrows within the wealth industry and even among some in the fintech community. Chris Brycki of robo advisory company Stockspot said there were a number of contradictions in Spaceship's disclosures.

"It promotes itself as 'futuristic super' yet the stocks it buys are those that have already done extremely well," Mr Brycki said. "Targeting novice investors to chase hot stocks is a classic and dangerous financial industry ploy."

Mr Cannon-Brookes said, if Spaceship could just get more people to think about their super, the venture would have succeeded.

"You get your Vodafone bill and it's 'f--- it's $100 a month'. Dude that's so irrelevant compared with this."