Bonds vs Share popularity in super and SMSF

Asset for SMSFs

Assets in SMSFs

There has been much debate recently about whether superannuation funds have too much in shares and not enough in bonds. The basic argument is that compared with other big countries, Australian pension funds have a higher share allocation and a lower bond allocation, at 50 per cent and 18 per cent respectively, which this leaves members exposed when shares plunge. Although the share allocation in super may be relatively high, this does not appear to be the case if Australian households’ total wealth is considered. Thanks to a huge allocation to housing, Australians tend to have a much higher allocation to non-financial assets compared with other countries and a relatively low exposure to shares outside of superannuation.

Reported in “Beware the bond hysteria” 5 April 2012 | Shane Oliver, BRW, page 16

There is a reported bias towards equities/shares in Australian investors, especially seen in self-managed super funds. Vanguard Australia has joined the rush to capture a share of the $400 billion controlled by self-managed super funds with the launch of a new tradeable fixed-income product. The product is the seventh exchange traded fund offering bond market exposure launched in less than a month and comes as the debate over Australia’s historical bias towards equities reaches fever pitch. “Institutions or large super funds have always been able to access a diverse range of fixed-income products either by funds or institutional mandates,” Vanguard’s head of retail Robin Bowerman said. “This is aimed at the self-managed-super-fund-type investor.”

5 April 2012 | James Frost, The Australian, page 26


About SuperBenefitnews

Self-Managed Superannuation Service Providers in Australia. SuperBenefit provides a wholistic SMSF assistance, education and administration service continuum - 1. “assistance” is help of whatsoever nature where our overall SMSF experience and knowledge enables us to provide assistance/help without any legal (or “license”) limitations. 2. “education” involves providing knowledge through teaching, coaching and mentoring about all matters SMSF, including (but not limited to) investment issues such as equities and property, 3. “administration” encompasses all admin aspects of legally required SMSF trustee and member record keeping including (but not limited to) audit and ATO matters. In keeping with our key point that SuperBenefit does not provide Financial Advice, where issues arise from 1, 2, and/or 3 above Indicate a need for a legally authorized provider (such as a Financial Adviser) and the client does not have their own service provider, the client can utilize SuperBenefit’s ‘Connect Assist’ … SuperBenefit, in itself, does not provide Financial Advice, but it does provide the wherewithal for great SMSF service. WE do not provide Financial Advice or any other service that requires a legally authorized provider. However, where such advice or service is required we have our ‘Connect Assist’, a SuperBenefit resource we use to connect clients to a Licensed Advisor or other legally authorised service provider. Call us 0407 361 596, no obligation FREE Connection call to see how we can help you!
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