What are the rules for buying bitcoin in my SMSF? Why is Macquarie’s next dividend only partly franked? What are the current industry sector weighting? What do the major brokers say about Treasury Wine Estates?
Question 1: If I want to buy bitcoin for my SMSF, are there any rules I need to follow? Are there any bitcoin ETFs?
Answer: We are not recommending you buy bitcoin! Because it is a highly speculative asset, the ATO has established the following rules:
“While SMSFs are not prohibited from investing in crypto assets, the investment must:
- be allowed under the fund’s trust deed
- be in accordance with the fund’s investment strategy
- comply with the same regulatory requirements as apply to other investments – as set out in the Superannuation Industry (Supervision) Act (SISA) and Superannuation Industry (Supervision Regulations (SISR).
For tax purposes, crypto assets are not a form of money but are capital gains tax (CGT) assets.
We strongly encourage SMSFs to seek independent professional advice before investing in crypto assets.
When acquiring or disposing of crypto assets, SMSFs must also keep full records of their crypto transactions.
For more information on the nature of crypto assets and the risks of investing in them, see ASIC’s Money Smart website” .
The most active ASX listed ETF is VanEck’s Bitcoin ETF (ASX Code: VBTC). There is also the Global X 21 Shares Bitcoin ETF (ASX Code: EBTC).
Question 2: Macquarie (MQG) is about to pay a dividend of $2.60 per share next week. Why is it only franked to 35%?
Answer: Macquarie shares have only been partly franked for some time now. This is because it is earning so much of its revenue offshore, and while it pays tax on this revenue, it is not to the Australian Government via the ATO. Companies can only frank dividends if they pay tax to the ATO.
Interestingly, the percentage franked has dropped to 35% (from previous dividends of 40%), showing just how material offshore revenue is to Macquarie Group. It really operates a global business!
Question 3: Some of the brokers, such as CommSec and nabtrade, break down the market’s performance by industry sector. I understand that the biggest sector is financials, so a movement in financials has a bigger impact on the ASX 200 than a movement in one of the smaller sectors. What are the current sector weightings?
Answer: I access the industry sector weightings from S&P Dow Jones (www.spindices.com). Weightings at 30 November were:
Question 4: Treasury Wine (TWE) has been in the news recently with the acquisition of a vineyard in China. Its stock price has been pretty subdued. What do the major brokers say?
Answer: The brokers are bullish on Treasury Wine Estates (TWE). According to FN Arena, all but one of the major brokers has a “buy” recommendation on the stock. The consensus target price is $13.71, 15.7% higher than the last ASX price of $11.85. The range is a low of $11.50 up to a high of $14.80
On multiples, the brokers have Treasury Wine trading on about 19 times forecast FY25 earnings and around 17 times forecast FY26 earnings, and a prospective dividend yield of 3.5%.
