That time of the year again. Sit up and watch the tour and do the superannuation return.
I use BGL’s simple fund to do the books. At this stage the books are not audited for 2011/2012 but everything balances.
The fund has two members both in accumulation phase for next 20 odd years. Only a very small amount of contributions/rollovers added this year. The fund is sufficient that we try to minimise contributions.
Even though this is an anonymous forum I’m choosing to keep balance private - to put the returns and strategy into context it should be sufficient to indicate that the fund is in excess of a million dollars. The combination of fund balance and time until access allows for an aggressive risk profile.
Strategy is basically to buy quality businesses at a price that I think makes sense and hold them for as long as the business continues to perform. If I can't find anything to buy at the right price I stay liquid and wait.
Cash & Interest rate securities currently stands at 13% of funds, the rest is invested in 9 Australian listed companies Not a lot of activity this year, one company sold in script offer and replacement is being sold down, some rebalancing of positions that have grown large and some accumulation of a couple of the other holdings.
Gross Investment Return = 19.25%
(2010/2011 = 63.40%; 2009/2010 = 37.45%)
After tax and expense Return = 17.30%
(2010/2011 = 56.54%; 2009/2010 = 30.67%)
Due to unrealised gains there is a difference between tax expense and tax paid. This difference is accounted for as a ‘Deferred Tax Liability’ and is currently an additional $39,000 per Million of Net Assets that is available for investment. This amount is effectively a tax free loan from the tax office until a capital gains event occurs. If that event does not occur until after age 60 the tax office will kindly wave the liability.
Administration expenses including life insurance = .08% [$800 per Million of Net Asset]
Brokerage = .03% [$300 per Million of Net Assets]
Anybody else like to share their SMSF thoughts, strategies or results.