Question: As I am interested in Chinese companies as an investment, could you please advise how an Australian investor can access Chinese companies? Could this be achieved via exchange traded funds (ETFs), and given that these would probably not have launched yet, is it a case of waiting until ETF providers advertise the launch of a China A Shares product?
Answer (By Paul Rickard): You cannot buy A Shares unless you are a qualified foreign institution. You can buy H shares – which are issued by Chinese companies and trade on the Hong Kong Stock Exchange. Some Chinese large cap stocks have both A and H shares.
Buying H shares is pretty easy – major brokers such as CommSec or nabtrade offer an online service.
In regards to the inclusion of A shares in the index, the initial weighting is only 0.8% (yes, less than 1%) so the impact is going to be very small. In due course, index and other funds will invest in A shares but it will be very much a slow burn.
Question: What does a Government co-contribution received into an SMSF get categorised as? Is it a concessional or non-concessional contribution?
Answer (By Paul Rickard): The Government co-contribution is classified as a non-concessional contribution, however it doesn’t count against the general $100,000 non-concessional cap.
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