Join Australia's most dynamic and respected property investment community

Thoughts on my SMSF portfolio

Discussion in 'Other Asset Classes' started by Cadbury99, 21st Jun, 2015.

  1. Cadbury99

    Cadbury99 Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    75
    Location:
    Sydney
    Below is the makeup of my SMSF portfolio, just wondering if anyone has any comments. I decided to stick 100% to ETF's in SMSF. I've been running this SMSF for just over 2 years and it has returned a little over 16% p.a. after expences. It was around 20% before the recent market pullback.



    Symbol Company Name %
    IEM iShares MSCI Emerging market ETF 5%
    IJR ishares US Small cap 7%
    ILC iShares S&P/ASX 20 3%
    IOZ iShares MSCI AUS 200 27%
    IVE iShares MSCI EAFE ETF 8%
    IZZ iShares CHINA ETF 7%
    RCB Russell Aust Corp Bond ETF 3%
    STW SPDR 200 FUND 16%
    VAF Vanguard AUS Fixed interest 2%
    VAP Vanguard A-REIT 11%
    VTS Vanguard US Total Market 10%

    To summarise

    Aust Equities 46%
    International Equities 38%
    Aust Property 11%
    Aust Fixed Interest. 4%

    There's also a small amount of cash (about 1% of value of portfolio).

    I have still have an industry super fund with another 15% spread across Aust small caps and international property. I kept this for a number of reasons; access to cheaper life insurance, Aust small caps seem to do better with active management, no international property ETF.

    My wife and I are members and still have at least 5 years before we can/will need to access it. The balance does not currently meet our retirement requrements so it still very much a growth focused portfolio. We have a property portfolio mostly in my personal name for which the plan is to rely on once the super runs out.


    Also does anyone one have any strategies to limit losses if we have a market downturn without moving everything into to much lower return assets (e.g. Bonds). Anyone tried options as protection in an SMSF?

    Thanks in advance.
     
    The Falcon likes this.
  2. The Falcon

    The Falcon Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    957
    Location:
    Sydney
    Good looking high growth model portfolio. Out of interest, what yield is being achieved, and how far away is that from the amount you need to cover your living expenses?
     
  3. Cadbury99

    Cadbury99 Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    75
    Location:
    Sydney
    Yield since inception has been 3.85%

    It's a long way off being able to cover living expenses, the overseas securities in particular do not return a high yield. It would need to triple to cover basic expenses.
     
  4. The Falcon

    The Falcon Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    957
    Location:
    Sydney
    Got it. Super and SMSF in particular is a huge subject area that I have only a limited knowledge of, so these comments are from a mug punter. Have you had specific SMSF / Tax advice with regards to your other assets? I think this could be valuable if you havent.

    From the looks of things you are doing everything right (incl. using the industry super funds cheap insurance :)), the asset allocation looks good given your circumstances. Portfolio size is the issue here, I would be loath to suggest changing asset allocation because reducing growth assets now isn't going to help you. I have no idea about short term market movements, but believe with 30+ years you will want your SMSF to last that you should stay fully invested in growth assets given your current portfolio size, and do whatever you can to increase your "work" income, and salary sacrifice as much as possible in coming years. No magic bullet here I am afraid. My 2 cents only. Good Luck mate :)
     
  5. CatCafe

    CatCafe Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    172
    Location:
    NSW
    Holy smokes thats alot of funds. I've only got one fund to cover all of my international exposure, VGS.

    But I'm also heavily weighted towards aussie equities in the form of the large traditional LICs for the stable and tax advantaged income stream.
     
  6. Cadbury99

    Cadbury99 Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    75
    Location:
    Sydney

    Thanks for the feedback - I found an absolute gem of an accountant so am fully covered in terms of tax advice. I took some financial advice before I started the SMSF but they told me nothing that I didn't already know and charged a motza for the privelege. I do take pleasure in tracking my SMSF against their high growth fund and see mine beat it every month.

    In terms of increasing my work income; first challenge is to have a job - I was retrenched late last year and am in no rush to go back to work.
    Luckily I have a good size property portfolio outside of super and after 15 years of loyal serice I got a good payout. I just have to be patient and wait for the CG to occur.
     
  7. Cadbury99

    Cadbury99 Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    75
    Location:
    Sydney
    VGS is a fairly new fund, it only listed in Nov last year. I just had a quick look at it, it appears highly weighted to large US companies, followed by Europe and Japan and not much else. I picked the ETF's in my SMSF to have more diverification than that.

    I don't think having 11 different ETF's is a particularly large number and gives me flexibility to adjust the assett allocation as the markets change. For instance i placed quite a high allocation overseas as it appeared fairly obvious the AUD was going to drop vs USD. I think it will still go further, but when I think it has bottomed out I will probably reduce US exposure.
     
  8. Coolcup

    Coolcup New Member

    Joined:
    27th Jun, 2015
    Posts:
    1
    Location:
    Sydney
    Would you be able to share their details via PM? I am looking for one as we speak, and noticed you are in Sydney so would be good to get a recommendation!
     
  9. Cadbury99

    Cadbury99 Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    75
    Location:
    Sydney
    Wasn't sure how to PM on propertychat so I created a one on one conversation with you. Perhaps that is the equivalent of PM'ing on propertychat.
     
    Coolcup likes this.
  10. Redwing

    Redwing Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,018
    Location:
    WA
    Definitely not a simple 3 or 4 fund portfolio :)

    There would be a lot of double up of stocks within (i..e ASX 20, MSCI & SPDR ASX 200, A-REIT) is the goal with so many funds to reduce volatility or..?

    MSCI Emerging market ETF 5%
    US Small cap 7%
    S&P/ASX 20 3%
    MSCI AUS 200 27%
    MSCI EAFE ETF 8%
    CHINA ETF 7%
    Russell Aust Corp Bond ETF 3%
    SPDR 200 FUND 16%
    Vanguard AUS Fixed interest 2%
    Vanguard A-REIT 11%
    Vanguard US Total Market 10%
     
  11. Cadbury99

    Cadbury99 Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    75
    Location:
    Sydney
    Yes for divercity and therefore (in theory) less volatily. My expererence so far shows it to be working. It's also worth noting that there is a certain reliance of ETF issuers doing the right thing, spreading ETF's across multiple ETF providers is a form of risk mitigation.

    There is some double/ triple up in the Aussie funds.
    I have IOZ and STW as I'm a bit undecided which is best. Both track very similar indexes, main difference between indexes is (i think) that STW includes News Corp with IOZ does not. STW has bi-annual dividends, IOZ quarterly. IOZ has lower fees. STW tracks the index better as it is highly traded, IOZ less so.
    I added some ILC late last year when my thinking was that the big companies were going to better than the smaller one.

    Not sure why people comment that this is a large number of funds. If I tried to do this with individual shares I'd have to have dozens of holdings.
    It's not hard to track 11 ETF's.

    I use sharesight to keep a track of them although shortly I'll probably drop that in favour of a system called class which my accountant uses. It will get direct feeds from banks etc. so keeps track of nearly everything automatically.
     
  12. See Change

    See Change Timing Lord Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    2,280
    Location:
    Sydney
    We've protected our SMSF from a downturn in the share market by investing in property ...

    I saw numerous people's retirement plans crucified by the GFC

    Cliff
     
    KayTea likes this.