The ASX is confident about the diversification opportunities its mFund service will give SMSF trustees, noting the heavy allocation to ASX-listed securities and cash in the SMSF sector.
Speaking to SMSF Adviser, Marcus Christoe, senior manager, funds and investment products at the ASX, said while SMSFs have “probably picked the market correctly” in recent years, there are opportunities for SMSFs to diversify their investment portfolios.
“If you look at the SMSF sector at the moment, there’s [over] $500bn worth of funds, approximately 40 per cent of all that money is in ASX-listed securities. Now that’s typically within probably the top 20 stocks at the moment,” Mr Christoe said. “The next largest amount is actually all sitting in cash.”
“What we do is we see that there are opportunities for SMSFs to diversify some of their investment portfolio into other asset classes, and that’s really the opportunity that we’re giving within [mFund]; we’re giving them a greater range of products to consider in terms of that risk return-based environment.”
Mr Christoe also said the ASX, to date, is satisfied with the level of engagement with mFund, which was launched earlier this year.
The ASX is looking to “broaden and deepen” the number of products available on mFund, he added.
“We’d be looking, at least over the next six months, to [expand] that out to over 100 particular products, and that’s an indication we’ve had from fund managers who are seeking to put their products on in the short term,” he said.
“We’re also looking to increase the range of distribution partners and direct participants that clients can place their orders through, so that’s something that’s currently standing on a month-by-month basis.”
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