It’s rare to get inside the Australian Securities Exchange’s ‘mind’. But that was the aim of the session, The SMSF trustee through the ASX looking glass, run by Ian Irvine, head of consumer and business development at ASX.
SMSF trustees see the ASX as the logical place to access investment products and a broad range of shares in local companies. The ASX specialises in providing investors access to robust investments such as banks, miners, telcos and retailers, all of which pay fully franked dividends that are attractive to SMSFs. However, portfolio congestion around large-cap Aussie equities is a common issue. So the ASX has been progressively broadening its product range to reduce this risk.
This is helping SMSF investors achieve a genuinely diversified portfolio, to assist them in protecting their retirement savings and reduce the chance of volatility or sequencing risk destroying the value of their assets.
For instance, investors can buy listed investment companies and ETFs on the ASX. These tools provide local and international exposure to sharemarkets and lesser-known asset classes, such as ETFs for commodities. Funds are another innovation and provide access to unlisted managed funds covering a broad range of asset classes.
SMSF trustees rely on advisers to recommend appropriate ASX products to help them achieve their investment goals. This session was an opportunity for delegates to understand the full breadth of the assets clients can access through the exchange to help diversify portfolios.
During the session, the ASX also outlined SMSF investment behaviours. These investors tend to be early adopters of new products, compared with other retail investors. They are also more inclined to invest internationally, in asset classes such as global equities, infrastructure and property.
This session was an opportunity for SMSF advisers to learn more about how to offer their clients a cost-effective opportunity to widen their asset base, as well as smooth out and enhance their returns.