Name: George Lucas
Other members of the SMSF: My wife.
How long have you had your SMSF?
The SMSF was established not too long ago in 2010.
Why did you start it up?
My wife and I wanted more control over our money. We also wanted to invest in investment options and a style that suited us rather than being in a product where one size fits all. We were also attracted to the flexibility of estate planning that can come with an SMSF.
How big is it?
The SMSF is big enough to suit our investment objectives at around half a million.
Is it more or less difficult to manage than you thought it would be?
It is less difficult. But I am in the finance industry and advise clients on asset allocation. So I am doing a lot of that work as part of my day-to-day job anyway. It is easy to translate those strategies to our SMSF.
Do you enjoy managing it?
I am not sure ‘enjoy’ is the right word. It is just part of life these days where you need to be more responsible for your retirement.
Are you pleased with its performance?
Yes. Because I am in an industry that relies on the investment industry and the market, we run our SMSF very conservatively to offset some of the risks associated with my job. It has significantly beaten our target return of 7% per annum while retaining a defensive allocation.
What is your asset allocation?
The SMSF has very little in domestic equities. It probably has about half in cash at the moment. We tend to favour international equities at the moment. The fund also has structured products as we have a good understanding of these products and that helps in building our own capital preservation strategies.
I’m still a long-term investor. I’m not trading it. I’m not significantly overweight anything, except defensive assets. I’m underweight equities but that’s just because I work in the industry. Because if everything goes belly up in the industry I work in, I don’t want my SMSF to as well.
What are your favourite investments/stocks and why?
We are very interested in Japan right now, as it is a four-pronged story. It is an earnings growth story, a valuation story, which has been proven again this earnings season. It is an asset allocation story as more domestic Japanese funds increase their weight to domestic equities and also a restoration story as Abenomics continues. We invest in Japan through products that InStreet issues.
I have liked the resource companies and the material stocks, but that hasn’t done very well, and the banks because of their yields. If you think, especially a couple of years ago, when you could only claim to have 8 or 9% growth in the market, the banks were paying that in dividends.
What investments do you have outside of superannuation?
We have investments in unlisted companies, direct properties and in my own business.
Do you use an advisor or any kind of service provider?
Yes I recently started using the services of a financial advisor, who assists on compliance issues and is a sanity check for my asset allocation.
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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