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This week's Productivity Commission Draft Report is unlikely to affect the retirement savings of the vast majority of Cuffelinks' readers. It addresses default super for those who do not choose a fund, usually at the start of their working life. With the third stage of the Report not commencing before 1 July 2017, it will be years before changes are implemented.   

There's no such thing as a typical investor, but a common lifetime pattern goes like this: after education, find a job, save seriouslyg, buy a home, begin paying off the mortgage, invest in other property, buy bank shares, invest in index funds, put extra cash into bank hybrids. It looks like a good asset allocation in a diversified portfolio, but it's mostly the same risk: residential property. The latest minutes of the Reserve Bank Board say increases in investor loans, "... suggest that there had been a build-up of risks associated with the housing market." Everyone should know their exposure to this sector and the banks, especially since the Big 4 comprise 27% of the S&P/ASX200 Index.

Investors are always looking for an edge, an extra piece of information not closely watched by others. Chris Stott shares one of his early warning tips.

The new super rules are forcing thousands of people to review their retirement plans, and Julie Steed warns there are also insurance and estate planning consequences. Still on the new rules, defined benefit super arrangements remain extremely common although rarely offered to new employees, and Melanie Dunn explains how such plans will be treated under the new transfer balance cap.

New research on SMSF investments shows a significant disconnect between what SMSF trustees expect from their portfolio and the assets they actually own. Trustees are in for a rude shock.

The concept of duration may sounds arcane, but Jarod Dawson shows why it's important to know the duration of a fixed interest portfolio to understand the exposure to interest rate rises.

It's usually not worth large super funds investing in microcaps because these tiny companies cannot 'move the needle'. This leaves the field open for other investors, but Steven Vaughan and Sriram Srinivas argue for a better way to pay performance fees on microcap funds.
        
Graham Hand, Managing Editor
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“Australia’s foremost independent financial newsletter for professionals and self-directed investors.” - Australian Investors Association
The latest insights and ideas from hundreds of market experts

Newsletter Edition 196, 31 March 2017


Insider sales can be a powerful warning
by Chris Stott
Purchases and sales of shares in their own company by directors and executives can be a powerful sign of the future potential within a company and should be monitored closely. Read more…

How super changes impact insurance and estate planning
by Julie Steed
Super fund members should review their estate plans and insurance arrangements in light of the new transfer balance cap rules. Read more…

Defined benefit pensions and the transfer balance cap
by Melanie Dunn
Defined benefit pensions once meant sitting back and enjoying the guaranteed income flow for life, but their treatment under the new pension rules is a potential minefield. Read more…

SMSF investments do not match objectives
by Graham Hand
Many SMSF trustees are expecting miracles from their portfolio, setting them up defensively to deal with risk while expecting returns over 10% a year. Something’s got to give. Read more…

Interest rate duration: how exposed are you?
by Jarod Dawson
Investors need to know the interest rate duration of their fixed income portfolios and its impact on the capital value of their portfolios ahead of potential rate rises. Read more…

Fairer performance fees for limited-capacity managers
by Dr Steven Vaughan and Sriram Srinivas
Big super funds are often crowded out from microcap opportunities due to limited capacity, leaving an opportunity for smaller funds and other investors provided the performance fees are fair. Read more…
Additional features this week

Weekly Market Update from David Bell, CIO at Mine Wealth + Wellbeing

Indicative LIC NTA Report from Bell Potter

PDF version of Cuffelinks Newsletter

Please note our Continuing Professional Development (CPD) quiz will be delayed until next week due to a system redesign

Plus updates and announcements on the Sponsor Noticeboard on our website
 
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