With the number of SMSFs in Australia approaching 600,000, recent ATO statistics have highlighted some worrying trends when it comes to how balanced and diversified those SMSF portfolios are.
The ATO has found that the majority of portfolios are overweight cash and property, along with a strong bias to Australian shares and with little – or no – exposure to international equities. Such a portfolio mix could result in many SMSFs opening themselves up to concentration risk and failing to meet their investment objectives under changing market conditions.
Building a balanced portfolio has never been more important for SMSF trustees – and with exchange traded funds it has never been easier.
The BetaShares/Investment Trends ETF Report found that the number of SMSFs holding ETFs has grown from 83,000 in 2015 to 100,000 in 2016. We expect that number to continue to climb as SMSFs increasingly learn about the benefits of investing via ETFs.
BetaShares provides a range of Funds that allow SMSF trustees to:
Add instant diversification
With a single trade, investors can get exposure to a diversified portfolio of shares, including Australian or global shares, European or Japanese shares, or shares that are part of some of the most important global sectors.
Maximise income and franking credits
SMSF investors are often attracted to income generating investments which they can use to fund lifestyle purposes. BetaShares has developed a range of income-focused funds which have proven particularly popular with SMSF investors. For example, our Dividend Harvester Fund (managed fund) has been designed specifically with the needs of SMSF investors in mind, and aims to maximise income and franking credits that come from Australian shares.
Reduce portfolio volatility
SMSF investors are increasingly demanding products that provide exposure to shares with lower levels of risk/volatility. BetaShares Managed Risk Series aims to defend against market losses whilst still aiming to provide exposure to the growth and income potential from a portfolio of Australian or international shares.
Reduce the costs of investing
Studies have consistently shown that fees contribute significantly to the performance of investment portfolios over the long term. Betashares’ passive or rules based investment funds have lower costs than comparable traditional managers focussing on the same area, as there are no ‘active management’ fees.
Just like shares, ETFs are eligible to be bought inside Self-Managed Super Funds, and the popularity of ETFs has been growing strongly with this client base.
Add international exposures – without additional administration
All of BetaShares Funds are Australian-domiciled which eliminates the requirements for W-8 BEN forms and the risk of US estate tax issues that can come from investing in products which are ‘cross-listed’ from the US, as is the case with a number of ASX-traded ETFs.
Improve transparency and simplicity in your SMSFs
Fund information including value of the Fund’s assets, net asset value per unit, indicative net asset value per unit and portfolio holdings, where applicable, are available daily on our website