Your Thoughts on My Super

Discussion in 'Superannuation, SMSF & Personal Insurance' started by Realist35, 15th Jan, 2018.

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  1. Goodison

    Goodison Active Member

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    Your right, access to those investment opportunities (private equity/direct property/direct infrastructure) is very limited for retail, there are a couple of funds retail investors could look at, but options are very limited, a couple I have looked at before in this space (a while ago I was looking at what was available in this area for my own non super investing.. didnt find a lot):
    - Blue Sky Alternatives - (real mixed bag this one.. bits of everything floating in it with private equity/direct property/water trading/agri property/hedge fund). They have been growing FUM so quickly in such a short space of time and there isnt a very long term track record for a lot of their various components that make up the fund.
    - Partners Group Global Val - Unless you are wholesale investor, only available on platforms. This fund is dedicated Private market fund and has a longer track record comparedto Blue Sky.
    - AMP Cap Core Infrastructure - as far as I know the only infrastructure fund that purchases unlisted assets that is available to retail?
    - Direct Property - A few Aus funds floating around for retail investors, dont think I came across any for overseas property. (Cromwell Direct Prop fund, AMP Cap W Aus Property, AUI Property for Income, all of the Charter Hall direct funds etc).

    As you said, quite hard and expensive for retail investors to get this exposure outside of industry super funds.
     
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  2. The Falcon

    The Falcon Well-Known Member

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    Ah yes, I should have clarified. You can buy more expensive, lower quality exposure as an individual. It pretty much defeats the purpose. Hard to replicate endowment type asset allocation as a punter unfortunately. Might be good for a seperate thread at some point.
     
  3. pwnitat0r

    pwnitat0r Well-Known Member

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    Depends on how much it costs to run a SMSF and what returns can be generated compared to industry or retail superannuation.

    I expect returns of 5-7% above a retail super fund in my SMSF, so setting up with ~$100k was acceptable for me. Since I have a corporate trustee I can have up to 4 individuals which will also bring down costs as they are spread amongst more people and more funds - I've added my partner and my brother to spread the costs and hopefully give them better performance!
     
  4. Goodison

    Goodison Active Member

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    Your return expectations appear quite high.

    To confirm, how do you anticipate generating so much outperformance (after all costs) with a relatively small pool of funds for an SMSF?
     
  5. pwnitat0r

    pwnitat0r Well-Known Member

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    Performance-ony fee managers who are tracking along historically at 16% and 14% p.a after performance fees are paid.

    Added my partner's super and my brother's super so running costs should be circa 1%.
     
  6. Goodison

    Goodison Active Member

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    Thanks, so you mean like the Solaris Aus Equity Performance Alignment Product? (No MER/base fee they just take a cut of outperformance only?

    I am assuming what you are from saying from is that your SMSF is 100% invested into Australian listed equities?

    This leads me to believe that any outperformance you are generating over an industry/retail fund aggressive portfolio could be simply from concentrating into a single listed market as opposed to having global share exposure. Listed markets are fairly well correlated no matter where they are geographically now.. but still, this is adding some additional concentration risk to your approach if so, not everyone may be comfortable with that risk.

    I am interested in knowing more about these funds you have selected and how they are generating their outperformance? Are they high conviction/benchmark unaware stockpickers or value/contrarion or something completely different? (I imagine they must be if you feel they can generate that sort of alpha over an extended period of time).
     
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  7. pwnitat0r

    pwnitat0r Well-Known Member

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    I am not familiar with Solaris so can't comment with certainty, but it sounds similar.

    I know there are some investments on stock exchanges other than the ASX, but I'm not sure in what percentage... or how much is invested in Australian equities.

    Both fund managers are value investors and hold concentrated portfolios, you can find more information on their websites and any specific questions are probably best directed at them.

    castlereaghequity.com.au

    https://egpcapital.com.au/
     
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  8. The Falcon

    The Falcon Well-Known Member

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    @Goodison Small Cap (and Micro) value stock pickers, with small FUM as they are typically investing in fairly illiquid stocks. They are exposed to small + value premium and typically higher Beta than the market. Bear in mind lot of the return is in the form of realized capital gains as these are not buy-hold portfolios.
     
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  9. Journeyman

    Journeyman Well-Known Member

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    Totally depends on structure and what you want from it. Our SMSF investments are very low cash yield, but through structuring delivers phenomenal advantages outside of SMSF. Talk to one of these gurus about what you want to achieve. There are plenty of useless super and financial advisers out there, so get the right team around you.
     
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  10. Goodison

    Goodison Active Member

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    Yeah, to me it looks like people that have read Dodd, and probably Buffets letters and decided they can do the same (i'm not saying that doesnt work, long term value has a pretty great track record of getting alpha.. but there are also a LOT of managers in the value space (a lot of fairly good managers too))... really these guys appear to be differentiating themselves on their fee structure. Tbh I have a personal feeling that the return hurdle in that Castlereigh fund is too low for that level of fee and the space they are in.

    Tbh I have taken a quick look, given the field they are playing there is no way those guys can grow FUM and keep the outperformance pawninator is hoping for unless they have and stick to a tight cap on FUM.

    Similar space, but different investment philosophy and I was impressed by the morals of the Hyperion team years ago of not just talking about capping FUM. But actually following through and putting a hard cap/closing their Small Cap Growth fund. (Disclosure.. I actually have some of my own $$ invested in both Investors Mutual Future Leaders and Hyperion Aus Growth, I have been reasonably happy with both, they both do exactly as they say on their packaging and turnover in the underlying portfolios is not too much).