Question: Which would be the better investment, Macquarie shares or the new Capital Notes 2?
Answer (by Paul Rickard): They are two very, very different investments. Macquarie Capital Notes are more like a fixed interest security than a share. There is no potential for capital growth. You cannot get back more than the $100 you pay for the Note. If your objective is income, then Macquarie Capital Notes. If your objective is capital growth, then Macquarie Ordinary shares. Both have downside risk, but in all likelihood, your price risk on Macquarie Capital Notes is lower than on ordinary Macquarie Shares.
Question: “My husband and I are beneficiaries of our own SMSF that has a corporate trustee where we are both directors. We are both 56. I work part time in 30% tax bracket. I am administering our fund. We have most of our super in Australian shares and US shares and small amount in cash. I was thinking of commencing a transition to retirement with re-contribution strategy. I use cloud based SMSF software so I know my account balance at any time. In order to commence a transition to retirement it’s my understanding assets in the fund have to be divided up between my husband and myself. How is this possible when 95% are in shares? Do I need to make a decision as to which shares would be moved to the asset base for paying the pension?
Answer (by Tony Negline): There is no need to split assets between members, unless it is mandated by your fund’s trust deed. Some trustees want to do this for personal reasons (they have an emotional attachment to a particular fund asset) or estate planning reasons (they want a particular asset bequeathed to particular beneficiaries) or tax planning purposes. You might consider taking advice about this issue.
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.
