SMSF Returns

[nulla nulla]

Still cheaper to do it yourself.

Yes, you are right sometimes it is cheaper doing it yourself

And more satisfying when you see the performance of your self managed funds consistantly out performing the "professional" funds.

 

[Julia]

Link to ATO's report on latest stats on SMSFs.
http://www.superguide.com.au/compar...funds?utm_source=SuperGuide+Newsletter&utm_ca

 

[sydboy007]

From the looks of it using esuperfund is not terribly expensive then?

Also removes a lot of the burden of record keeping, unless you do some investments they can't track electronically

Think I'll be doing my first return shortly as I only set up my SMSF a few months back.

happy to have received $1365 in grossed up dividends last month. Be a couple of leanish months before I get another bust of income flowing into the fund.

Must admit it's quite rewarding to be able to have complete visibility of where the income and capital gains is coming from. can't wait for the end of the year comes to see if my strategy has worked out the way I'm planning.

 

[craft]

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.

2011/2012 results.

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.

Expenses:

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.

2012/13 Gross Investment return = 45.74%

2012/13 After tax return = 40.71%

Administration expenses = .04% [$400 per Million of Assets]

 

[craft]

2012/13 Gross Investment return = 45.74%

2012/13 After tax return = 40.71%

Administration expenses = .04% [$400 per Million of Assets]

This is the equity curve for the year. (rebased to 100)



The blue straight line is just a linear regression line.

 

[craft]

This is the 10th set of financial reports since my wife and I switched our super into a SMSF. So I can now extract 9 years worth of performance figures.

CAGR over those 9 years has been 34.4%. (after tax) The CAGR for the Allords accumulation index over the same period has been 7.9%

100K compounded at the index return over those 9 years would have grown to $197,716 (ignoring tax) whilst 100K in the SMSF has grown to $1,427,500. (after tax)



My focus is investing for future cash flow.

The chart below shows the Income Stream and Net Value [different scales]



Whilst mark to market valuation jumps around a bit in the short term and includes a negative year in 2009 the income stream is more stable and consistent; to date the income stream has grown at a CAGR of 42.3%.

18 Years left until preservation age

 

[McLovin]

Well done craft. I only hope to be able to emulate your returns one day.

Your posts in the various threads on this forum have helped me immensly in reaching that goal, so thanks.

 

[VSntchr]

Whilst mark to market valuation jumps around a bit in the short term and includes a negative year in 2009 the income stream is more stable and consistent; to date the income stream has grown at a CAGR of 42.3%.

18 Years left until preservation age

Congratulations Craft. You have achieved a position that I am striving for.

Whilst I have 37 years (unless it changes, which it likely will) until preservation age, my goal is firmly set to get there MUCH faster. You are an inspiration for me!

 

[Intrinsic Value]

This is the 10th set of financial reports since my wife and I switched our super into a SMSF. So I can now extract 9 years worth of performance figures.

CAGR over those 9 years has been 34.4%. (after tax) The CAGR for the Allords accumulation index over the same period has been 7.9%

100K compounded at the index return over those 9 years would have grown to $197,716 (ignoring tax) whilst 100K in the SMSF has grown to $1,427,500. (after tax)



My focus is investing for future cash flow.

The chart below shows the Income Stream and Net Value [different scales]

View attachment 53108

Whilst mark to market valuation jumps around a bit in the short term and includes a negative year in 2009 the income stream is more stable and consistent; to date the income stream has grown at a CAGR of 42.3%.

18 Years left until preservation age

Congratualations. I should get you to manage my investments because you are doing a much better job than I am.

 

[Huskar]

This is the 10th set of financial reports since my wife and I switched our super into a SMSF. So I can now extract 9 years worth of performance figures.

CAGR over those 9 years has been 34.4%. (after tax) The CAGR for the Allords accumulation index over the same period has been 7.9%

100K compounded at the index return over those 9 years would have grown to $197,716 (ignoring tax) whilst 100K in the SMSF has grown to $1,427,500. (after tax)



My focus is investing for future cash flow.

The chart below shows the Income Stream and Net Value [different scales]

View attachment 53108

Whilst mark to market valuation jumps around a bit in the short term and includes a negative year in 2009 the income stream is more stable and consistent; to date the income stream has grown at a CAGR of 42.3%.

18 Years left until preservation age

Fascinating craft some stellar figures there!

Out of interest by "income stream" do you mean dividends/interest received? And what is your investment policy with respect to dividends: direct reinvestment (if available) or accumulate cash?

 

[skc]

Whilst mark to market valuation jumps around a bit in the short term and includes a negative year in 2009 the income stream is more stable and consistent; to date the income stream has grown at a CAGR of 42.3%.

Very well done Craft. Most impressive is the small drawdown during GFC and the spurt afterwards.

Question please: of the income stream growth, how much of the 42.3% is organic vs increased asset base? Rough estimates will do - don't need to do a co-variance analysis!

 

[craft]

Your posts in the various threads on this forum have helped me immensly in reaching that goal, so thanks.

I can’t accept credit for anything that you have managed to take from my posts – that belongs to you. But I am pleased all the same that some of my dribble may have thrown a little light.

 

[Klogg]

Oh, wow. CAGR of 34.4% is insane!

Sorry to add to the list of questions, but do you invest in global companies, or just on the ASX?

 

[craft]

Whilst I have 37 years (unless it changes, which it likely will) until preservation age, my goal is firmly set to get there MUCH faster. You are an inspiration for me!

37 Years I’m very envious.

I’m not sure about being an inspiration, but what I would be happy for my story to say is that if It can happen for me then it's within anybody's reach because I’m not special – but I am very passionate about investing and have put in a lot of time and been prepared to take a fair bit of risk.

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Congratualations. I should get you to manage my investments because you are doing a much better job than I am.

Sorry marriage is a pre-requisite to have me manage anybody's money and I've already hit my 1 customer limit.
- - - Updated - - -

Sorry to add to the list of questions, but do you invest in global companies, or just on the ASX?

Just ASX and my preference seems to be small but not tiny non-miners. things I can actually understand the books of. Sometimes bigger companies if I think there's a strong macro tailwind.

- - - Updated - - -

Very well done Craft. Most impressive is the small drawdown during GFC and the spurt afterwards.

Funny how a single year data point can gloss over so much. The monthly is much more volatile and the lived experience scared the crap out of me. Mostly the spurt was a result premature accumulation. The very bottom just saw me sitting there saying “what in the **** dose everybody know that I don’t understand?". The market since GFC has been the best that I have experienced as a stock picker, mainly I think because the P/E’s have been compressed so the prices move more in line with underlying business results.

Question please: of the income stream growth, how much of the 42.3% is organic vs increased asset base? Rough estimates will do - don't need to do a co-variance analysis!

Not a lot of capital has been added relatively speaking since the initial roll over. A bigger impact on the number is that the first year wasn’t fully invested so more rust and less dividends. Using the second year as the start point drops the return to 35.9%.

Over the very long run cash flow drives capital growth. So ex asset base increase my best guess would be that the income stream growth is very similar to the long term investment return give or take a bit of PE difference between now and 2004.

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Out of interest by "income stream" do you mean dividends/interest received? And what is your investment policy with respect to dividends: direct reinvestment (if available) or accumulate cash?

Yep dividends and interest. Started the year at 13% cash finished at 6% cash. I don’t like cash. Always feel pressure to get it invested. The aim is to be near fully invested and reinvest dividends evenly over the year into the best value I can find at the designated time. Would only purposely build cash if I perceived it to offer a better long term return then investment options – hasn’t happened since 2007.

I haven’t been as disciplined in my reinvestment process as I should have been of late. Mucking around at the edges bringing forward and delaying cash deployment to try and add a bit of value in short term timing and in the process wasting thinking and effort without I feel adding any real value to the long term strategy. I put my increase in activity down to stimulation from forums etc which I was never involved in as I developed my approach.

On that note – I’m trying to not come her to often so sorry if I miss a few posts.

Catch you infrequently.

 

[Huskar]

I haven’t been as disciplined in my reinvestment process as I should have been of late. Mucking around at the edges bringing forward and delaying cash deployment to try and add a bit of value in short term timing and in the process wasting thinking and effort without I feel adding any real value to the long term strategy. I put my increase in activity down to stimulation from forums etc which I was never involved in as I developed my approach.

On that note – I’m trying to not come her to often so sorry if I miss a few posts.

Catch you infrequently.

I couldn't agree more.

The tendency to act is hard enough to resist at the best of times and the more you opinions you hear (and therefore respond to) the more you engage the heuristics of commitment and consistency or social proof: I say X therefore I must act in accordance with X; or they do Y therefore Y must be good.

Doesn't matter how much you know about such tendencies they are impossible to resist (see Cialdini, Influence for more).

We crave recognition (even if we don't like to admit it) because we are fundamentally social animals.

And as religion teaches us, abstinence is far easier than moderation.

Well that's my rant for the day...

 

[craft]

Equity curve for 2013 calendar year (rebased to 100)

White line (bottom) is the XSO accumulation index – this index probably best describes the tide that influences the stocks I tend to invest in.

Red line (middle) is the All ordinaries accumulation index. This index best describes the passive index tracking approach I would take if not managing my own super.

Yellow line (top) is the equity curve. Volatility has returned since May and I have been sitting through a period of consolidation. MMS had a big impact in July.

 

[Ves]

Hi craft - welcome back, hope you had a great Christmas and New Year period and that your travels were enjoyable.

My equity curve for 2013 looks fairly similar to the Accumulation Index... although it's about 4-5% higher in total return for the year.

What software are you using to generate the equity curves? I'm still using MS Excel for mine, and only enter the market data in manually at the end of the month and when I make a purchase (which is mechanially mid-month if there is value on offer). so there are far less data points, anything more is very time consuming.

 

[craft]

Hi craft - welcome back, hope you had a great Christmas and New Year period and that your travels were enjoyable.

Thanks and same too you.

What software are you using to generate the equity curves? I'm still using MS Excel for mine, and only enter the market data in manually at the end of the month and when I make a purchase (which is mechanially mid-month if there is value on offer). so there are far less data points, anything more is very time consuming.

The portfolio manager module on a pretty basic bit of charting software called insight trader. Simple as pressing one button to generate/update the file and then charting it as per any other security.

 

[Ves]

The portfolio manager module on a pretty basic bit of charting software called insight trader. Simple as pressing one button to generate/update the file and then charting it as per any other security.

Thanks for that. It's a shame that it is embedded within the trading / charting software and there is no option for a standalone version! Looks really good, I will have to keep an eye out for similar stand alone software packages with the same functionality.

 

[craft]

Is anybody using or familiar with the new simplefund 360 trustee edition administration software?

My renewal for simplefund desktop is due and it looks worthwhile migrating to the new cloud based version, just wondering if anybody has already made the move and if there was any hiccups.

Or is anybody using the client access version of simplefund 360 via their SMSF administrators? If so what are your thoughts?