In a post-GFC era, SMSF trustees are looking beyond traditional investments to diversify their portfolios, according to AMP Capital.
Speaking at a roundtable in Sydney last week, AMP Capital’s head of SMSF Tim Keegan noted that historically there’s been a high skew towards direct equities and cash in the average SMSF trustee’s portfolio.
“In this kind of volatile market where returns are much lower, the importance of asset allocation is becoming much higher now,” Mr Keegan said.
Mr Keegan said SMSF trustees are now “awakening” to different types of investment strategies, particularly in light of the significant drop in returns on cash in recent years.
“Clearly fixed income beyond term deposits is now in a trustee’s mindset,” Mr Keegan said. “The hunt for income is on.”
Mr Keegan noted there are various asset classes available to trustees outside of traditional safe havens.
“When we’re thinking about growth assets in the accumulation phase, the role of global equities, the role of infrastructure as a relatively new asset class, we think it’s pretty important in terms of getting the right mix and risk-adjusted returns,” Mr Keegan said.
“Whilst SMSFs typically might have commercial property where it’s their own premises, the idea of having a diversified mix of high-yielding commercial property, I think, has largely been missed by trustees.”
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