The Not-Exactly-Rocket-Science SMSF Portfolio

[Big A.D.]

There have been a couple of threads on Silver Stackers about how/why/if superannuation is a scam/rort/rip-off. My view, basically, is that saving money for your retirement is a good idea but you should be actively monitoring your super fund's returns and making any adjustments that you need to to ensure your retirement lifestyle is as safe and secure as possible. I'm well aware that institutional fund managers having been performing well lately and that they also charge fees for their (dis)service, but it's your retirement and therefore in your interests to dump them and go it alone if necessary.


To begin with, lets see exactly how badly the institutional super funds suck. This is an index of average returns over various funds: http://www.superratings.com.au/latestreturns

Summary: Any fund returning more than 3% is fantastic (read: fantastically crap).


So, here's a breakdown of asset allocations in a SMSF that even an idiot could set up and run. I call it The Not-Exactly-Rocket-Science SMSF Portfolio because this is not complicated stuff. There is no clever strategy involved. All this portfolio does is put a third of your money in cash, a third in shares and a third in bullion (split 50-50 between gold and silver).

That's it.

Here it is:

Cash

Portfolio weighting: 33.3%

UBank SMSF USaver Account

Source: http://www.ubank.com.au/ub/web/smsf/smsf-usaver

Rate: 6.11% (includes "bonus interest" rate applicable to months where no withdrawals are made).


Bullion:

Portfolio weighting: 33.3% (50% gold, 50% silver)

AUD Spot Price, add premiums for physical metal from your local bullion dealer

Source: http://goldprice.org/

Rate:

Silver: 26.66% p.a. (2009-2011 YTD average)

Gold: 11.16% p.a. (2009-2011 YTD average)


Shares:

Portfolio weighting: 33.3%

SPDR ASX 200 Accumulation Index Fund (ASX Code: STW)

Source: http://www.spdr.com.au/etf/fund/fund_detail_STW.html#

Rate: 6.90% p.a. (3 year annualised rate)


Now, a quick back-of-the-envelope calculation says...

Total Portfolio Return: 10.64%


Analysis: The Not-Exactly-Rocket-Science SMSF Portfolio, which is very simple and very conservative, returns over 3 times more than the best institutional funds do.

So, do yourself a favour - read hiho's Setting up a SMSF 101 guide, take control of your money and then go back to doing whatever you usually did while the big fund managers were punting your retirement savings away because managing this portfolio is not exactly rocket science.

 

[nonrecourse]

When I got involved with making a submission to the Cooper Review on Superannuation they had this summation from their research on SMSF's

http://www.supersystemreview.gov.au...mary_smsf/SMSF_statistical_summary_report.pdf

What this report demonstrated is what dogs the Retail and Industry funds really are. For as long as I have been running my own SMSF the retail and Industry funds have been telling porkies about self Managed Super. The financial review often use to have articles fed to it about the dodgy SMSF practices. These statistics showed that the number of SMSF's that were up to funny buggar nonsense was.000001%.

Compare that with the opaque trustees fees paid to union officials or the retail funds that loaned out members shares during the GFC so hedge funds could short the companies involved and the fees for that priviledge were paid to the trustees.

Be captain of your own SMSF ship good fortune.

Kind Regards

 

[Matthew 26:14]

Those dodgy union super funds..... like the NUW fund..... run by ex union hacks put in as "trustees" so they can gracefully move into their own retirement on the fat salaries they get for attending bugger all board meetings.