Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 280

Cuffelinks Newsletter Edition 280

  •   16 November 2018
  •      
  •   

Something for everyone this week, so please forward to anyone who might benefit from a free subscription. If this newsletter has been forwarded to you, please click here to register and receive a range of free ebooks on investing.

SMSF global asset exposure

There is a marketing ploy used by a few global equity managers which always makes me question the quality of their research. I saw it again last week. A high profile manager presenting to over a hundred retail investors quoted the ATO data on SMSF investments in global equities as 1.3%. Even the ATO says it's incorrect. The presentation material said, "Concentration risk is possibly the biggest risk in a typical SMSF portfolio." Their chart is reproduced below.

The chart on the right hand side is more accurate. Hasan Tevfik of MST Marquee is a long-time SMSF watcher, and his estimate gives an allocation to global equities of about 12%. In addition, the Productivity Commission reports a global bond allocation by SMSFs of about 3%, and there would be more in asset classes such as infrastructure. The 'global assets' number is more likely about 15% and nowhere near 1.3%.

 


The fund manager should do better. Not only does it question the quality of the research, it shows a lack of understanding of their client base and perhaps dubious transparency.

Labor welcome to submit an article

No other topic has generated as many comments in Cuffelinks as the Labor proposal on franking credits. Clearly, due to our type of audience, most comments are critical, but many support Labor. After we posted the request from Tim Wilson MP last week, a reader wrote: "The Wilson-led enquiry is no doubt a smoke screen for a forthcoming Liberal 'pensioner scare campaign'." 

We will publish a Labor response if they write it for us, and an invitation has been extended. Both sides of politics are guilty of misrepresenting the retrospective nature of policy changes. We argued Scott Morrison did this with the superannuation changes when he was Treasurer, despite his assurance:

"That is why I fear that the approach of taxing in that retirement phase penalises Australians who have put money into superannuation under the current rules – under the deal that they thought was there. It may not be technical retrospectivity but it certainly feels that way. It is effective retrospectivity, the tax technicians and superannuation tax technicians may say differently."

But Labor is equally guilty claiming policy changes have no retrospective element, such as:

"While making change to the tax system to improve fairness is a policy objective of Labor, it must be done without negative retrospective impacts on existing investments. This same approach was taken by Labor (in) the announcement policy to curb generous and excessive tax concessions for high income superannuation accounts."

Let's call it one-all for political-speak on financial policy changes.

At the risk of presenting one side of the argument again, Jon Kalkman argues Labor's proposal has the greatest impact on low income earners due to the 30% company tax rate. Peter Burgessbacks up his view in an attached paper.  

More on investing and strategy ...

Sam Wylie delves into the three big fees you should check in your investment portfolio, and Noel Whittaker shows in certain circumstances, the $1.6 million cap no longer needs monitoring.

Rachel Lane challenges the other Royal Commission, the one on aged care, to remove the complexities and anomalies, while Recep Peker reports new research on how investors are suddenly pessimistic on share market returns. Prescient given recent falls?

In a reply to my 4Ps of roboadvice article last week, Harry Chemay has provided a comprehensive response.

The new CEO of the Australian Financial Complaints Authority (AFCA), David Locke, writes exclusively for Cuffelinks on how it will operate


This week's White Paper from BetaShares is their latest update on the ETF market. Showing more institutions are using the market, ETFs had their highest turnover for a month at $3.9 billion.

For the first time, the Financial Services Royal Commission comes to Sydney next week. The best free show in town starring the bank CEOs starts at 10am Monday at 97-99 Goulburn Street. 

Graham Hand, Managing Editor

 

For a PDF version of this week’s newsletter articles, click here.

 


 

Leave a Comment:

banner

Most viewed in recent weeks

Australian house prices close in on world record

Sydney is set to become the world’s most expensive city for housing over the next 12 months, a new report shows. Our other major cities aren’t far behind unless there are major changes to improve housing affordability.

The case for the $3 million super tax

The Government's proposed tax has copped a lot of flack though I think it's a reasonable approach to improve the long-term sustainability of superannuation and the retirement income system. Here’s why.

Tariffs are a smokescreen to Trump's real endgame

Behind market volatility and tariff threats lies a deeper strategy. Trump’s real goal isn’t trade reform but managing America's massive debts, preserving bond market confidence, and preparing for potential QE.

The super tax and the defined benefits scandal

Australia's superannuation inequities date back to poor decisions made by Parliament two decades ago. If super for the wealthy needs resetting, so too does the defined benefits schemes for our public servants.

Meg on SMSFs: Withdrawing assets ahead of the $3m super tax

The super tax has caused an almighty scuffle, but for SMSFs impacted by the proposed tax, a big question remains: what should they do now? Here are ideas for those wanting to withdraw money from their SMSF.

Getting rich vs staying rich

Strategies to get rich versus stay rich are markedly different. Here is a look at the five main ways to get rich, including through work, business, investing and luck, as well as those that preserve wealth.

Latest Updates

SMSF strategies

Meg on SMSFs: Withdrawing assets ahead of the $3m super tax

The super tax has caused an almighty scuffle, but for SMSFs impacted by the proposed tax, a big question remains: what should they do now? Here are ideas for those wanting to withdraw money from their SMSF.

Superannuation

The huge cost of super tax concessions

The current net annual cost of superannuation tax subsidies is around $40 billion, growing to more than $110 billion by 2060. These subsidies have always been bad policy, representing a waste of taxpayers' money.

Planning

How to avoid inheritance fights

Inspired by the papal conclave, this explores how families can avoid post-death drama through honest conversations, better planning, and trial runs - so there are no surprises when it really matters.

Superannuation

Super contribution splitting

Super contribution splitting allows couples to divide before-tax contributions to super between spouses, maximizing savings. It’s not for everyone, but in the right circumstances, it can be a smart strategy worth exploring.

Economy

Trump vs Powell: Who will blink first?

The US economy faces an unprecedented clash in leadership styles, but the President and Fed Chair could both take a lesson from the other. Not least because the fiscal and monetary authorities need to work together.

Gold

Credit cuts, rising risks, and the case for gold

Shares trade at steep valuations despite higher risks of a recession. Amid doubts that a 60/40 portfolio can still provide enough protection through times of market stress, gold's record shines bright.

Investment strategies

Buffett acolyte warns passive investors of mediocre future returns

While Chris Bloomstan doesn't have the track record of his hero, it's impressive nonetheless. And he's recently warned that today has uncanny resemblances to the 1990s tech bubble and US returns are likely to be disappointing.

Sponsors

Alliances

© 2025 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.