Yields the key for SMSFs in 2012
With turmoil offshore continuing to impact local investment markets, Aaron Dunn, managing director of the SMSF Academy, believes the focus for self-managed super funds in 2012 has to be yields.
"Whilst there's volatility, and it really depends on the age of the investor, but predominantly what people will be looking for is strong yields," he said.
"If you take QBE as an example, it was paying a very attractive yield, but then all of a sudden they've brought out a profit result that's more than halved their dividend.
"So you'll find that the self-managed super fund market will now be far less attracted to that stock because its ability to provide a solid income is now in question."
Dunn pointed out that a range of SMSFs investors had benefitted enormously through the BHP Billiton and Woolworths buybacks that occurred in 2011, and that they would continue to seek out those stocks which were capable of ramping up returns by anywhere from 1 to 3 per cent.
"I expect an attraction to property - specifically around SMSFs and their ability to borrow - will also continue," Dunn added.
"The fact that we had some clarity come out of the tax office last year around what you can do in terms of acquisitions under the single acquirable asset, and then also what you can do to make improvements to properties, means that we'll see more activity there as well."
And on the back of recent discussion that the SMSF sector was seeing more and more younger entrants, Dunn said that such investments trends would be an attractive prospect.
"They can, after all, take a 20 or 25-year view within their fund on some of these types of investments and look to take advantage over the longer term," he said.
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