Question: Should I sell the AMP Capital China Growth Fund (AGF) shares I purchased in June?
Answer (By Paul Rickard): AMP Capital put out a statement this morning that said that 19 of the 80 stocks in AGF were currently in a trading halt. They also say that its NAV as at 29 June was $1.83. Today, it is trading at $1.11.
I calculate that the Shanghai Composite has fallen by 14.5% since 29 June, and the Shenzen A Share index by 19.9%.
I don’t pretend to have a crystal ball on the Chinese share markets – or contemplate the next steps that the Chinese Government may take to try to stop the rout.
However, on the basis of the fall and considerable discount that AGF is trading at, I wouldn’t be a seller at these levels.
Question 2: I am loving your site as it has a wealth of information on setting up and running an SMSF. I have a newly set up SMSF and am committed to a property purchase within the fund. I am currently looking to arrange the finance. Do you have a current article on SMSF lenders? My research so far shows State Custodians have the best variable rate of 5.09% while Bank of Queensland has the best fixed rates of 4.29% for three years and 4.59% for one, two, four and five years.
Answer 2 (By Paul Rickard): No, we haven’t published a more recent update on SMSF lenders [1] because the talk has been that the Government will move to restrict or ban it (prospectively, not retrospectively). You may recall that this was one of the recommendations from David Murray’s Financial Systems Inquiry. The Government is shortly expected to announce its response to the Inquiry’s recommendations.
Recent changes I am aware of include both NAB and ANZ pulling out of this market, partly in response to APRA clamping down on investment lending for housing.
State Custodians is certainly a player, as is BOQ, which has some of the best fixed rates. I would also look at AMP and St George.
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