My SMSF – a balanced approach after big gains

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One of our first respondents to our My SMSF questions was CEO of Xpress Super, Olivia Long. It’s 18 months since she answered our questionnaire so we decided to go back to her to find out how much her fund has changed, if at all, and what she’s learned in the past year and a half. Read her first article here.

Name: Olivia Long.
Age: 38.
Other members of your SMSF: Myself and husband Mark.
How long have you had your SMSF: 8 years.

Your fund was $275,000 when we first spoke. How big is it now?

My fund is now valued at over $350,000. Despite numerous debates over the dinner table, my husband (who is risk adverse) has kept his insurance in his corporate super fund to keep things simple, but maintains a small balance in our fund.

Your cash allocation has reduced substantially. What have you decided to invest in, and why?

I’ve invested a significant amount in a technology stock, Mobile Embrace (MBE). The principal activities of the company are the business-to-business provision of integrated mobile and digital communications products and services.

EPS growth has been exceptional over the past five years. Return on equity is excellent and forecast to continue improving. I think we are likely to see a considerable increase in the share price over the next two years.

The most exciting addition to my portfolio still has to be Xero Ltd – initially listed on the New Zealand stock exchange and now trading on the ASX.

What’s important when you have a stock you truly believe in, is to ride out the market fluctuations and try not to panic if a share price jumps around. Xero is currently trading at $15.54 (it topped the market at close to $43) so rather than panic, I’m going to hang in there for the long haul.

Have you ever thought about investing in property in your SMSF?

Yes, but considering I’m overweight in property investments personally, I’ve decided to balance this out by focussing on equities within my SMSF.

Are you worried by some of the suggestions coming out that the Murray review may try and put a cap on borrowing in SMSFs?

I’m concerned for clients, not necessarily myself. Some of the best utilisation of the borrowing strategy we’ve seen, applies to clients acquiring business real property. I’d hate to see this group penalised by any changes to current legislation.

Do you use an advisor or any kind of service provider?

Now that I’ve seen some significant gains in my portfolio, I’m hedging my aggressive stock selection against a more balanced portfolio, and have decided to outsource some of the decision making to the experts.

I still use a private portfolio manager (O’Kane Investment Services) but now I’m using their Balanced Portfolio, which consists of a range of customer stable stocks, customer variable stocks and cash/income securities (Previously I used their Absolute portfolio).

The objective of these portfolios is a mix of capital growth, income and importantly, capital preservation. The benchmark portfolio has 70% exposure to stocks and 30% cash like securities.

How has your fund performed?

To date, my portfolio is up close to 30% on cost. Below is the performance of the balanced portfolio of O’Kane Investment Services, which I use.


Has your thinking changed at all over the last 18 months about your SMSF? Would you ever consider going back into a corporate or large fund?

Absolutely not. I love the control! My fund balance continues to go up and down from time to time, but overall I’m miles ahead of where I would have been had I stayed in another superannuation vehicle.

Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.

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