The Treasurer Joe Hockey’s ‘no surprises’ Federal Budget involves limited superannuation and taxation changes, with a number of key measures having been announced prior to Budget night. Of note is the Government’s announcement that it will reform a number of family assistance measures, as well as the means test for the Age Pension.
Financials currently make up about 40% of the Australian ASX 200 market index. Since self managed super funds are commonly used to invest in direct shares it is crucial to get a clear understanding of the risk your super fund is exposed to should it hold a substantial amount of its capital invested in Australian shares.
The global banking regulator (Basel Committee on Banking Supervision ) is of the view that Australia’s banking regulator (APRA) lenient treatment of investment property loans means its five largest banks aren’t holding as much as capital against these assets as they should be.
Self managed super funds are a great way to take control of your retirement savings, build wealth tax effectively and maximise flexibility and returns. But how much super is enough?
Most balanced super funds have between 4-10% of monies invested in emerging markets (constituting Brazil, India, China, Russia, South Africa, some South American countries and some Middle Eastern countries).
How much exposure you should have in your self managed or retail fund depends on your strategy and outlook for these regions.