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Financial Happenings Blog
Tuesday, December 11 2007

The Australian today reported on a study of Self Managed Super Funds conducted by three Queensland academics.  The sample size was small and geographically restricted but provides some anecdotal evidence of traps experienced by SMSF holders.


The study had three key findings:

  • The SMSF sampled were overweight in cash compared to standard commercial super funds
  • Less than a third of the funds performed better than the ASX300
  • The study concludes that funds need between 20 - 30 assets to benefit from diversification with the SMSF's sampled averaging only 12.


I think the report provides further evidence of the importance of diversification.  We believe that portfolios, including self managed superannuation funds, benefit from diversification across a large number, if not all, of the available assets within a particular asset or sub-asset class.  If not suitably diversified, investors significantly increase the risk of not attaining the returns they 'deserve' from investment markets.  Please take a look at our Building Portfolios web page for more details.


PS - We also believe that there are some other major traps for SMSF holders to consider for example paying too much in fees and understanding the ramifications to the fund on the death of one of the trustees, but more about these at a later time.




Scott Keefer

Posted by: Scott Keefer AT 10:26 pm   |  Permalink   |  Email
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