Question 1: I have an SMSF and am looking at adding an ETF to it. I currently like the following: IOZ VAS, STW & A200. I’m looking for quarterly income and wondering if there is any you can recommend outside these?

Answer: All the ETFs you have mentioned are broad-based ETFs that track an Australian benchmark index such as the S&P/ASX 200. There are income focussed ETFs that invest broadly, albeit they have skews around sectors and stock characteristics. One that I like and that invests broadly is VHY (Vanguard Australian Shares High Yield ETF). It pays distributions quarterly.

Question 2: What are the main super changes coming into effect on 1 July?

Answer:  There are four main changes:

1. The super guarantee levy (the super paid by employers) goes up from 10.5% to 11%;
2. The transfer balance cap – the amount you can transfer into the pension phase of super – increases from $1.7 million to $1.9 million.
3. Eligibility to make non-concessional contributions expands with an increase in the total superannuation balance limit. Currently, the balance of your super must be below $1.7 million in order to make a non-concessional contribution. From 1 July, this increases to $1.9 million; and
4. The amount you must take from an account-based pension reverts back to pre-Covid levels. For the last four years, the minimum withdrawal from an account-based pension has been halved. For example, if you were 65, your minimum withdrawal was 2.5% of the account balance at the start of the year. From 1 July, this goes back up to 5%.

There are no changes to the contributions caps. Concessional contributions (employer, salary sacrifice and personal tax deductible) are capped at $27,500; non-concessional at $110,000.

Question 3: Can you please explain why, when looking at trading platforms such as CommSec or Nabtrade, the prices quoted for buying and selling ‘depth’ showing share prices and the number of buyers and sellers, appears to invert for the ~30 minutes before the market opens?

Answer: Yes, they often invert – twice a day. Once before the market opens, and then a second time between 4pm and 4.10pm when the market closes temporarily and then re-opens for a final single price auction. This is because the algorithm used to determine the opening price (at 10am) and the closing price (at 4.10pm) ensures that all buyers and sellers get the same price. Known as the single price auction, it is the price where each of the bid prices is higher than or equal to each of the offer prices. For example, if there is a buyer for 10 BHP shares at $45 and a buyer for 10 BHP shares at $44, and a seller for 20 BHP shares at $44, the clearance price will be $44.

To get “to the top of the queue” and be certain of transacting, some buyers bid really high prices, and some sellers offer shares at low prices (hence, an inversion occurs). This works fine provided the “volume” from the institutions is very close to the real market price.

If you look at market depth on CommSec or Nabtrade between 4pm and 4.10pm, you can see the indicative clearance price displayed. You will see it change almost second by second (if you refresh) in the final 60 seconds before the auction.

Question 4: Infratil (IFT) is raising about NZ$850 million to buy One New Zealand (formerly Vodafone NZ). Will retail shareholders be able to participate?

Answer: Yes, about NZ$100 million is being reserved for retail shareholders. Australian shareholders will be able to apply for up to A$45,000 at the institutional placement price, which is NZ$9.20 – about a 9% discount to the last market price. Payment must be made by 27 June.