Retirement
The simple way SMSF investors can get ahead
SMSF investors looking to build a prudent, well-diversified portfolio are being advised that they can do so in just a few trades.
The simple way SMSF investors can get ahead
SMSF investors looking to build a prudent, well-diversified portfolio are being advised that they can do so in just a few trades.
In conversation with nestegg, Six Park’s co-founder and co-CEO, Pat Garrett, explained a simple way investors can get ahead by reducing fees and purchasing well-diversified funds.
Mr Garrett said that through exchange-traded funds (EFTs), less experienced investors can gain exposures to the world’s leading markets.
“You want diversification within an asset class and diversification across asset classes,” Mr Garrett said.
“Australian shares are an asset class, so having a high level of exposure to Australian shares might be okay if you want a significant growth, but having minimal holding is not well diversified.”
The fund manager noted that investors can still look at speculative growth assets so long as the core of the portfolio remains in well-diversified assets.
“If people want to pick stocks or play with crypto, that is fine in our view as long as outside that activity, there is a prudent portfolio to their overall investment,” Mr Garrett said.
He also highlighted the importance of selecting ETFs with lower fees, noting the quickest way to reduce a balance is through higher fees.
“Keeping your fees low, because high fees just erode returns in a really bad way.”
How to build a portfolio from scratch
Mr Garrett explained that investors who are looking to build their SMSF from scratch need to think about their long-term objectives, their risk appetite and time in the market.
“You probably want to have a good think about what the right growth defensive mix is, and then construct the portfolio through various ETFs,” Mr Garrett said.
Mr Garrett believes investors can, in just eight trades, have a broad fund that spans across Australian shares, international shares, infrastructure, property and cash.
“Within those eight trades and those eight exchange-traded funds, within those funds you’re essentially investing in 10,000s of companies across the world.
“The beauty of that is you can get instant portfolio diversification at very low cost and just manage the portfolio over time with things like rebalancing and periodic review of your situation and risk profile,” Mr Garrett concluded.
RELATED ARTICLES
About the author
About the author
Self managed super fund
Superannuation guarantee to be paid on government paid parental leave, says ASFA
The Association of Superannuation Funds of Australia (ASFA) has hailed the government's decision to include Superannuation Guarantee payments with its Paid Parental Leave policy as a critical step ...Read more
Self managed super fund
SMSF experts advise against hasty reactions to potential super tax changes
As the Australian Government proposes a new tax measure on superannuation earnings for balances exceeding $3 million, experts from the self-managed super funds (SMSF) sector are urging members not to ...Read more
Self managed super fund
Federal government announces changes to superannuation contribution caps
The Federal Government has announced changes to the superannuation contribution caps, impacting self-managed super funds (SMSFs) and their members from 1 July 2024. Read more
Self managed super fund
SMSF Association calls for joint effort to tackle early super access
The SMSF Association is calling on a collaborative approach including the Government, the Australian Taxation Office (ATO), the Australian Securities and Investments Commission (ASIC), and the ...Read more
Self managed super fund
Rest Super members file class action over alleged insurance premium deductions
Shine Lawyers has initiated a class action lawsuit against Rest Superannuation (Rest), alleging the unlawful deduction of income protection insurance premiums from members' superannuation accounts. Read more
Self managed super fund
Debunking a superannuation tax myth: SMSF Association clarifies the impact on Aussie farms
In the ongoing debate about a proposed new tax targeting superannuation funds exceeding $3 million, the SMSF Association has stepped in to challenge claims from the Association of Superannuation Funds ...Read more
Self managed super fund
Is an SMSF right for you?
When it comes to planning for retirement, one of the most significant decisions Australians have to make is how to manage their superannuation. Read more
Self managed super fund
SMSF growth continues after pandemic peak
The statistics have begun to change coming out of the COVID-19 pandemic, according to new findings from Australian Investment Exchange Limited (AUSIEX). Read more
Self managed super fund
Superannuation guarantee to be paid on government paid parental leave, says ASFA
The Association of Superannuation Funds of Australia (ASFA) has hailed the government's decision to include Superannuation Guarantee payments with its Paid Parental Leave policy as a critical step ...Read more
Self managed super fund
SMSF experts advise against hasty reactions to potential super tax changes
As the Australian Government proposes a new tax measure on superannuation earnings for balances exceeding $3 million, experts from the self-managed super funds (SMSF) sector are urging members not to ...Read more
Self managed super fund
Federal government announces changes to superannuation contribution caps
The Federal Government has announced changes to the superannuation contribution caps, impacting self-managed super funds (SMSFs) and their members from 1 July 2024. Read more
Self managed super fund
SMSF Association calls for joint effort to tackle early super access
The SMSF Association is calling on a collaborative approach including the Government, the Australian Taxation Office (ATO), the Australian Securities and Investments Commission (ASIC), and the ...Read more
Self managed super fund
Rest Super members file class action over alleged insurance premium deductions
Shine Lawyers has initiated a class action lawsuit against Rest Superannuation (Rest), alleging the unlawful deduction of income protection insurance premiums from members' superannuation accounts. Read more
Self managed super fund
Debunking a superannuation tax myth: SMSF Association clarifies the impact on Aussie farms
In the ongoing debate about a proposed new tax targeting superannuation funds exceeding $3 million, the SMSF Association has stepped in to challenge claims from the Association of Superannuation Funds ...Read more
Self managed super fund
Is an SMSF right for you?
When it comes to planning for retirement, one of the most significant decisions Australians have to make is how to manage their superannuation. Read more
Self managed super fund
SMSF growth continues after pandemic peak
The statistics have begun to change coming out of the COVID-19 pandemic, according to new findings from Australian Investment Exchange Limited (AUSIEX). Read more
