Recommended Reads

Balanced Investments, or Super Misleading?

Balanced Investments, or Super Misleading?: A hand-drawn line graph on graph paper, surrounded by stationary on a desk top.

In the latest of our Recommended Reads, Mancell Financial Group take a look at the problems associated with some superfunds and their potentially misleading claims about using a balanced investment strategy.

“For the past few years there has been a battle raging. Certain superannuation funds have not been backward about coming forward about their performance. Their ‘balanced’ options are the headline generators. Take out top spot and it’s plenty of media attention. This attention will attract new investors. People switching their super to the winner.

“For some, the term ‘balanced’ is misleading. True defensive assets are fixed interest (bonds) and cash. Some superfunds have snuck various other assets into the defensive column. Real estate. Infrastructure. Increasing their holdings of unlisted assets. Some even boasted of holding no cash or fixed interest.

“There was a problem. Those crying wolf were financial advisers or retail funds. Due to a poor industry reputation and the recent banking royal commission, who’d listen? They weren’t regarded as sympathetic or trustworthy actors. In turn, the risks of these mislabeled, incredibly aggressive superfunds, chock full of unlisted assets, mostly went unnoticed.

Until a few months ago when a perfect storm formed.”

Read the full article, including case studies, on the MFG website.

Baldwin Financial Services is based in Prospect in the northern suburbs of Adelaide.
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