सेल्फ मनागेद श्रूँणूआटीण फुन्ड्स एंड थे एथिकल INVESTOR

Self Managed Superannuation Funds and the Ethical Investor

A Self Managed Superannuation Fund requires a reasonable account balance to justify the establishment costs and trustee obligations. Generally a minimum of $200,000 with regular contributions would be needed. It is the only vehicle that can purchase properties directly for your purposes and interests.





Purchasing environmentally positive homes provides a tangible investment choice with environmental benefits. The annual rental income and growth adds value to your superannuation fund value.

In addition, there are social housing choices, such as the purchase of apartments or houses under the National Rental Affordability Scheme, that are rented below commercial rates to lower income earners with a government annual $9,140pa incentive payment over 10 years..

Investment can be made directly into commercial property tenanted by not for profit organizations or indirectly into this sector via mortgage trusts that provide loans secured against property with partial government security.

For example there is a mortgage trust that includes a Brisbane based women’s refuge where they are paying off the mortgage of the building, with high property equity, at commercial rates. This allows the refuge to have security of ownership rather than uncertain tenancy and eventually save ongoing resources once the loan is paid.

You can buy unit in traded Real Estate Investment Trusts that trade on the Australian Stock Exchange, which gives you a holding in larger commercial properties. Some of these property trusts have very high environmental covenants on their buildings and tenants and an ethical investment adviser can assist you in seeking out the more environmentally positive property trusts.

Having a self managed superannuation fund means that an investor can buy shares that they personally have an interest in and support businesses that reflect their ethical concerns and values.

The investor will have the share component of their superannuation fund invested predominately in the largest 50 Australian share companies in a similar ratio to the size of those companies. Therefore companies such as BHP, Santos, Woodside Petroleum and Rio Tinto with significant Coal, Petroleum and Uranium interests, would all be predominant shareholdings, in a standard superannuation fund.

Other Investment choices for the ethical investor are the bonds that provide capital risk management and security at a reasonable income return. These can be issued by companies with positive ethics including some banks as well as governments.

SMSF’s can be easily converted into pensions and in the right circumstances can be paying tax free income streams. SMSF’s are very flexible and there are several types of pensions that can be set up. These include Transition to Retirement (TTR) Pensions, where you are able to take a pension prior to retirement.

In most circumstances SMSF’s are able to take employer contributions and you can roll over most other supers into an SMSF.

Having a SMSF has its downside, as Trustees you would be responsible for the investments and ensuring that the super is run according to the various rules and regulations set out by the Australian Tax Office (ATO).
However you can enlist the services of your adviser or accountant to assist with the set up of the fund and the day to day running of the super.

You should consider a self managed super if:

You want a more ‘hands on’ approach.
You want control over the assets that are bought and sold.
You want to be selective about the investments you will have in your super fund.
You are not happy with the ethics and/or performance of your current superannuation fund.
You want to buy an asset like a residential property that cannot be bought through a standard super fund.

There can be up-front costs of setting up the SMSF, including the establishment of the Trust Deed and registering for an ABN with the ATO. Although some public offer supers also charge an up-front cost based on buy/sell unit prices.

The cost of running a self managed superannuation is generally around the same cost as a public offer fund, but slightly more than an industry fund with an ethical overlay. Ask your adviser for details of costs.

The beauty of a self managed superannuation fund is that you can invest your retirement savings your way and an ethical investment specialist can ensure that your risk and values are reflected within the choices recommended. You know where you money is invested and what its doing. A standard superannuation fund product is quite intangible and the underlying investments an unknown to most investors. Ethical investment within a self managed superannuation fund is quite empowering for our clients as well as financial rewarding”

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Article Source: AllBestArticles.com Self Managed Superannuation Funds and the Ethical Investor
About the AuthorEthical Investment Advisers Pty Ltd is a well established Brisbane based financial planning specialist with 3 local offices. http://www.ethicalinvestment.com.au/

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