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This commentary is written by Vanguard Principal, Corporate Affairs & Market Development Robin Bowerman. The title is A smorgasbord of choice

It was first published on Wednesday 3 August 2011

And is read by Michael Mullins

Please remember that advice in this podcast represents a general view. It is recommended that you seek specific financial advice, before making investment decisions.

One of the key attractions of self-managed super is, of course, the huge investment choice.

Within the confines of superannuation law, SMSFs have a smorgasbord of investment choice. For instance, they can invest in direct commercial and residential property, direct shares, exotic assets, geared assets, term deposits and unlisted shares.

And no doubt many SMSF members would gain considerable satisfaction from knowing they have such investment freedom – even if they choose not to take full advantage of that freedom, at least for the time being.

In practice, how far do SMSFs go in exercising their investment choice?

SMSF administration service Multiport released figures this week indicating that its 1600 client funds overall held 33 per cent of their assets in direct shares as at March 30, 40 per cent in cash and fixed interest, and 14 per cent in direct property.

Few funds appear interested in exotic assets such as artwork. The latest available Self-managed Super Fund Statistical Report, published by the ATO, indicates that only a very small amount of SMSF money is in exotic assets. 

The SMSF asset allocation statistics, released by the ATO and providers of fund administration services such as Multiport can be extremely useful to fund trustees. The statistics may, for instance, prompt a fund to review the effectiveness of its own asset allocation – perhaps under the guidance of a professional adviser.

And that concludes the column

A smorgasbord of choice

from Robin Bowerman,  Principal, Corporate Affairs & Market Development at index fund manager Vanguard Investments Australia

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Please remember that advice in this podcast represents a general view. It is recommended that you seek specific financial advice, before making investment decisions.