Question: Thank you for Peter’s marvellous article on Fangs.
I nearly always get my dealings in ETFs wrong, so I was wondering if you could suggest a managed leaders fund that specialises in the top 20 or 50 shares that might hold substantial holdings in some, or all, of the nominated companies.
Answer (By Paul Rickard): Thanks for the comment about Peter’s article.
There probably is an ETF listed on one of the US exchanges that specialises in investing in these companies (and their like), however, I am not aware of what it is.
Locally, you may want to consider an active manger like Magellan.
Have a look at this ASX quoted fund, which trades under the ASX code of MGE (product update attached). I am not sure whether he has positions in these companies, but they do sound like the sort of companies he would consider.
You could also look at a local ETF – the NASDAQ 100 ETF from Betashares. Tracks the NASDAQ 100 index. ASX code is NDQ.
Hope this helps.
Question: I currently have a small portion (about $130k which is about 30% of total) of my super with MLC, and the rest in our SMSF, which is largely invested in a residential property (which so far has been doing well).
My question is about Life/TPD and income protection insurances for myself.
I would like to roll over most, or all, of my super from MLC to my SMSF. However, as above insurances are through MLC, I am not sure if I can get cheaper insurance elsewhere if I completely leave MLC!
Are you able to help me make a decision, or make any recommendation? As additional info – my employer contributions are now going into my SMSF and I have the option of splitting the payments to two different funds. Should I decide to leave some in MLC to keep the account open and pay the premiums?
My main goal is to save the rolled over money in an offset account to reduce the interest on the loan, while also being able to buy shares.
Answer (by Paul Rickard): It is not unusual for a member of an SMSF to maintain a super account with a major industry or retail fund provider with the express purpose of accessing their insurance cover. Retail and industry funds will typically have “bulk buying” power when it comes to the provision of life/TPD and income protection insurances – and in theory, should be able to offer you insurance at a cheaper price than you can access it directly.
That’s the theory.
So, you now need to test this out (I can’t tell you whether your MLC policies are or are not more expensive). I suggest you contact some alternate providers (try BT Life, One Care, Macquarie Life etc.) and arrange some quotes.
A couple of points to note: a) you can no longer purchase “own occupation” insurance from super; and b) even if MLC are cheaper, I doubt you need to keep $130,000 in your account. You could probably roll over (say) $100K to your SMSF, leaving a balance of $30,000 to pay the insurance premium.
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