The ASX Managed Funds Service (AMFS) has the potential to be a “game changer” for SMSFs in the mould that exchange traded funds (ETFs) were, according to Quantum Financial.
AMFS, more commonly known as AQUA II, enables the “automation of settlement of applications and redemptions for managed funds on the ASX,” the ASX said. The service is tipped to go live in early 2014.
The ability to easily access a wide “supermarket” of managed funds is going to be particularly attractive for self-directed investors, Quantum’s senior wealth adviser Tim Mackay told SMSF Adviser.
“SMSFs [have] been good early adopters of ETFs and of direct shares, and those sort of clients will have an existing account with their broker, so this will be an easy add-on for them,” Mr Mackay said.
“[For] SMSF investors, I see it as a great opportunity; I can’t see any downside, assuming they understand the risks that they’re getting into,” he said.
Chief executive officer of Bell Direct Arnie Selvarajah added that AQUA II can help SMSF investors focus on portfolio diversification and maximising investment returns, rather than focusing on the cost of administration.
“My sense is [trustees are] not well diversified in their portfolio construction, so this is where I think AQUA II has a great role to play, Mr Selvarajah said.
“So they might be saving $3,000 to $4,000 in admin fees, but leaving $15,000, $20,000, $50,000... by not focusing on the performance aspect.
“If they can start to access managed funds easily, and cheaply, they could add different asset classes, different sectors, different geography [and] exposure into their portfolios and hopefully get a better result from the portfolio performance.”
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