Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 272

Cuffelinks Newsletter Edition 272

  •   21 September 2018
  •      
  •   

Among the investors who suffered most from the GFC are those scarred by the experience who moved into cash and term deposits for the last decade. Their income has fallen dramatically. Meanwhile, investors who stayed in a balanced portfolio, with an asset allocation like the one below, have seen investment returns in 10 years of over 80%, despite the initial ravages in 2008.

Research by Vanguard on 580 Australian balanced funds shows asset allocation is responsible for 90% of a diversified portfolio's return, leaving only 10% for factors such as stock selection. Yet many investors spend most of their time selecting shares or fund managers.

 

Asset allocation of superannuation funds excluding SMSFs


Source: Association of Superannuation Funds of Australia (ASFA).


This institutional portfolio mix differs from most SMSFs due to its larger allocation to global equities, unlisted assets and hedge funds. However, Marcus Evans shows SMSFs are increasingly diversified, and global equities are popular for new flows. 

This week, five insightful stories on investing: Roger Montgomery believes many so-called innovative and disruptive companies, including Afterpay and Tesla, are simply a tweak on an existing business modelSteve Johnson offers an honest mea cupla on his poor call buying Freedom Insurance, which fell foul of the Royal Commission last week; Erik Weisman explains what we can really interpret from the shape of the yield curve, which is worrying many investors; and Rudi Filapek-Vandyck gives his final summary of the latest ASX reportingseason. Back on the GFC, Brett Lewthwaite shares his personal view of watching the CDO market go crazy 10 years ago.

Continuing our debate on Labor's franking policy, Warren Bird responds to the readers who argue that SMSFs in pension mode should not have a zero tax rate. In fact, they've already paid tax. Yesterday, Treasurer Josh Frydenberg asked the Standing Committee on Economics to inquire about the implications of removing franking credits, and submissions can be made here.

Another Royal Commission, now into the aged care sector, hit the market this week, with Aveo, Japara, Regis and Estia all suffering heavy falls. The mortgage broking hearings were bad, superannuation was worse and insurance was shocking, but aged care will be the worst.

This week's White Paper from Accurium/Challenger is a subject often overlooked by SMSF trustees in managing the capital gains which form part of their assessable income each year.


Graham Hand, Managing Editor

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

 

  •   21 September 2018
  •      
  •   

 

Leave a Comment:

banner

Most viewed in recent weeks

Noel Whittaker’s take on the budget

Marketed as a fix for inequality and housing affordability, the latest budget instead delivers a tangle of tax changes that leave everyday Australians worse off.

Australia has no death duties. Technically.

Australia may not levy formal death duties, but a growing web of tax measures is quietly shaping what wealth passes between generations. Now, the 2026 budget adds another layer.

Lithium's rally is real this time – but no-one trusts it

The lithium rally mirrors the early-2010s tech stock surge, with demand set to double by 2030. Supply has been slow to respond, creating a market deficit for future tech like humanoid robotics and solid-state batteries.

Welcome to Firstlinks Edition 662 with weekend update

The debate over the budget is increasingly shaped by frustration and perceptions of unfairness, rather than clear-eyed assessment of policy outcomes.

How inflation is quietly moving the goalposts on retirement

Inflation doesn’t just raise today’s bills - it quietly increases the amount needed to retire, while simultaneously making it harder to save. Three steps to take before June 30th to improve retirement outcomes.

How to minimise tax with a will

Inheritance tax implications in Australia may surprise some, as poor estate planning without proper wills or trusts can lead to costly tax bills and delays for beneficiaries.

Latest Updates

SMSF strategies

Meg on SMSFs: The CGT changes don’t impact super but what about Div 296 tax decisions?

New CGT rules could tip the scales in the super vs non-super debate. For those facing the Division 296 tax, the case for withdrawing has gotten more complex. A "comparison rate" tool may help assess decisions.

Planning

Testamentary trusts post-budget: Estate planning, tax reform and the ‘death tax’ debate

Proposed Budget changes to taxation are casting new uncertainty over testamentary trusts, prompting closer scrutiny of estate planning structures and the real implications of reforms still taking shape.

Taxation

Income tax and bracket creep

Examining how five "tax cuts" stack up against bracket creep. Why offsets and incremental changes may do little to ease rising average tax burdens, compared to structural reform through indexation over time.  

Exchange traded products

The limits of a quality investing approach in Australia

Quality strategies shine globally, but Australia's concentrated market tells a different story. Limited diversification and sector dominance can constrain the defensive outcomes investors have seen in broader markets.

Investment strategies

Balancing opportunity and complexity

As private markets expand, investors face a growing mix of structures, a stabilising private equity cycle and uneven AI disruption. Fresh questions are being raised about where the real opportunities now sit.

Investment strategies

Why strong returns matter as much as generosity

As EOFY approaches, structured giving offers a tax-effective way to support charities, while allowing donations to grow over time and play a longer-term role in family wealth and legacy planning outcomes.

Investment strategies

The most important investment decision you’ll ever make

Stock picking often gets the spotlight, but research shows asset allocation explains the vast majority of long‑term returns. Understanding your mix of growth and defensive assets is the real key to investment success.

Sponsors

Alliances

© 2026 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.