INVESTING
Expect the unexpected with property
Property will continue to be a major part of the equation as SMSF trustees brush off their investment strategies. But Per Amundsen warns care will be needed because the world has changed.
PER AMUNDSEN is head of research at Thinktank.
24 selfmanagedsuper
With Victoria out of lockdown and some green shoots of recovery beginning to appear in other states, now seems an opportune time for SMSF trustees to revisit their investment portfolios. Although 2020 has been a year many would wish to forget – and not just on the investment front – overseeing an SMSF’s investment portfolio is a race that never ends. In this investment critique, property will be front and centre of the thinking of many trustees. On the latest ATO statistics, it comprises more than $110 billion (15 per cent) of total SMSF assets, with commercial property accounting for $73.5 billion
and residential $50.2 billion. Only cash/term deposits and listed Australian equities, at 21 per cent and 26 per cent respectively, have bigger slices of the SMSF asset pie. That trustees are attracted to property is unsurprising. Leaving aside the fact most have experience in this market via the family home, for a sizeable number investing in business real property can neatly dovetail their business goals with their retirement income strategies. The introduction of limited recourse borrowing arrangements (LRBA) in 2007 has helped facilitate this type of investment. But past knowledge of the property market,
