My SMSF – National manager SMSF advice MLC, Peter Hogan

Name of fund: Manyana Superannuation Fund
Trustees: Peter and Linda Hogan

How long have you had the fund?

Have had the fund around 12 years.

Why did you start it up?

We felt we had enough to commit to an SMSF that we could control – leaving substantial amounts in managed super accounts where investment decisions were not being made by us but by the fund managers. The amount in our SMSF is primarily for direct equity exposure and cash where we make the decisions.

Is it more or less difficult to manage than you thought it would be?

Day-to-day management is OK as keeping it fairly simple – no direct property exposure and so on.

We also use an external administrator to prepare accounts, returns annually – this requires a good deal of work to present the information about the activities of the fund for the year in a way that is needed – transactions undertaken through the year are stored electronically as they are undertaken.

Do you enjoy managing it?

Managing the fund is just part of the process of having a fund – the enjoyable part is making investment decisions with a long-term view in mind and hopefully seeing steady results – we are not active traders in the SMSF.

What is your asset allocation?

The decision we have made as trustees is to be invested as much as possible – predominantly in direct Australian equities with a smaller percentage of international equities through managed funds. Exposure to property is also through property trusts, rather than direct property, but also a smaller percentage of the SMSF. Cash holdings are built up to ensure we can meet expenses as they fall due, but also to provide a cash reserve for opportunities that may come up from time to time – but usually kept to a minimum.

What are your favourite stocks and why?

The focus of our stock selection is moving slowly towards yield stocks with dividends that are also fully franked the closer I get to retirement. While not concerned with the equity exposure, we want to maximise the cashflow generated by that investment where appropriate. We are mindful that there is a need to carry a little more cash in pension phase to meet those additional income stream payment obligations whenever that happens.

What investments do you have outside of superannuation?

Investments outside superannuation are predominantly for shorter-term financial goals – cash for anything within 12 months.

Do you use an advisor or any kind of service provider?

Linda is a financial planner and so discussions around what should be done with the fund are regular, especially if there is a build up of cash.

Contribution caps are maximised as much as is possible and are paid into the SMSF. Super built up elsewhere also provides for insurance cover as part of group life policy at competitive, affordable rates.

Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.

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