SMSF investors should look to the Nifty 15

Chief Investment Officer and founder of Aitken Investment Management
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Key points

  • The two major themes of ‘lower for longer’ cash rates driving dividend yield compression and a resurgent US dollar (falling Aussie dollar) driving earnings translation served investors well in Q1.
  • A good mix of equities and property is usually consistent with the requirements of both long-term capital growth and regular annuity-style income streams for SMSFs.
  • A style of “Nifty 15” has emerged in Australia, where dominant industrial franchises, with all the attributes of the US Nifty 50, have led the broader ASX200.

 

Q1 in Australian and global equities was strong. If you simply parked your investment capital in the equity markets with the strongest central bank support (then swapped the currency to US dollars), you made very strong capital gains. That included Australia, where the RBA, entering the competitive currency devaluation game, saw the ASX/S&P 200 have its best quarter since 2009, led by sustainable fully-franked dividend payers. The ASX/S&P 200 Accumulation Index (XJOAI) rose 10.2%, despite resources going backwards, while the ASX/S&P 200 Financials Accumulation Index (XFJAI) rose 13.4%, despite only one of the big four banks paying a dividend in the quarter

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