Morningstar Individual Investor Conference: Event wrap-up
An audience of 600 attendees had the opportunity to listen and learn from some of Australia’s top investment experts at the Morningstar Individual Investors Conference, held at the Wesley Conference Centre in Sydney on the 17th of October 2019.
The team from Sharesight were well represented, with both a Sharesight exhibition stand that was an excellent opportunity to engage with users face to face, plus a presentation from Sharesight CEO Doug Morris where he shared key data and insights on the performance of SMSF portfolios tracked in Sharesight.
Morningstar Individual Investor Conference takeaways
Our key takeaways from across the various sessions at the event are below.
The macro investment outlook - has Australia run out of luck?
Dr Shane Oliver - AMP
Reminded the audience of nine key lessons for investors:
Make the most of the power of compound interest
Don’t get thrown off by the cycle
Invest for the long term
Turn down the noise
Buy low and sell high - selling after a 20% fall just locks in a loss
Beware the crowd at extremes - shares bottom at the point of maximum bearishness
Focus on investments you understand and that provide decent, sustainable cash flows
Economic and investment outlook:
Global growth slowing but still okay - 2018: 3.6%, 2019: 3.2%
Rising risk of global recession from US trade wars - but it should be avoided
2019 GDP growth: China 6%, US 2%, Eurozone 0.7%, Japan 0.6%, Australia 1.9%
Inflation is below target in most countries - hence central bank easing
RBA to cut the cash rate to 0.25% - probably quantitative easing next year
$A to weaken further
Continuing low returns from bank deposits and bonds
Shares vulnerable to a short term pull back - but should provide okay returns over next 6.12 months
Key risks: trade war, President Trump, Iran tensions, global growth, China, Australian property market
The rise and rise of SMSFs: what does the future hold?
Robin Bowerman, Peter Hogan, Liam Shorte, Graham Hand (moderator).
(All answers paraphrased)
Increasing diversification in SMSFs particularly overseas assets over the last 3 years
Where before SMSFs were primarily a tax vehicle to invest in particular assets like property with little diversification that is changing
- ATO SMSF figures understate overseas exposure, since most SMSFs don’t invest directly on overseas exchanges - rather, they use ETFs to gain international exposure
ASIC figures on SMSF costs of $13k per year overblown, nobody in the room is paying that much, but maybe if you factor in financial advice as well
Sensible questions being asked by ASIC: “why is there only one asset in your SMSF (a property)? How does that ensure you’re diversified?”
$150k in assets yardstick to set up an SMSF might make sense for a 30yo but not as much for someone older
“Identify a couple of major technical issues for SMSFs”
New rules July 1 2017 still flowing through
Average account balance much higher and dealing with the $1.6m cap is an issue
Dealing with death benefits under current rules is causing headaches
“How are clients coping with generating income with rates so low?”
Infrastructure - SMSF investors like the idea of things they can see that generate income
Already have enough exposure to Australian equity
Still need to have that conservative part of your portfolio, but maybe enhance with a bit of extra risk for a portion that would otherwise be allocated to fixed interest investments to chase income
“What should an SMSF trustee be paying for an accountant + platform + advice?”
No set up or wind up fees
Depends how much you can do yourself
$1,500 in admin costs is not unreasonable for someone fairly active with an accountant that preps your annual statement
$2,000 for an all-in-one SMSF platform
Financial advice obviously costs extra on top of the above
In an uneventful year 2.5k wouldn’t be unreasonable all up
A glimpse into SMSF portfolios
Doug Morris - CEO Sharesight
Doug dove into the numbers we see at Sharesight for SMSF portfolios and used those figures to both debunk and confirm some common beliefs about SMSFs in Australia.
Do SMSF portfolios focus on dividend yield and franking credits?
Possibly, however the most held 5 stocks aren’t dissimilar to the 5 highest market cap ASX stocks.
Are SMSFs underweight exposure to technology stocks?
While the ASX is considered to be overweight on finance and mining stocks, SMSFs tracked in Sharesight are not underweight technology, both Technology Services and Health Technology stocks feature prominently in SMSF portfolios.
Do SMSFs underperform APRA funds?
On average the SMSFs tracked in Sharesight perform similarly to slightly better than APRA regulated super funds.
Watch Doug’s full presentation here
Individual investors love Sharesight
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Automatically track your daily price & currency fluctuations, and handle corporate actions such as share splits.
See upcoming dividend payments with the Future Income Report.
Get the full picture of your investment performance, including the impact of brokerage fees, dividends, and capital gains with Sharesight’s annualised performance calculation methodology.