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SMSFs drawn to global equities

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By James Mitchell
January 23 2014
1 minute read

SMSF investors can benefit from exposure to international equities through funds that offer lower volatility and higher income, according to Grant Samuel Funds Management (GSFM).

The Grant Samuel Epoch Global Equity Shareholder Yield Funds offer a globally-diversified equity portfolio of listed global companies, which has attracted a number of SMSF investors.

Speaking to SMSF Adviser, GSFM chief executive Andrew McKinnon said about 20 per cent of the funds' net cash flows are from SMSF investors

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“The funds are attractive because they offer lower volatility than most equity products and distribute high levels of income,” Mr McKinnon said.

“This has proven to be of great interest to SMSF investors who desire capital growth with substantial income as an investment objective.”

While SMSF investors retain a strong holding of Australian equities, property and cash, Mr McKinnon said the funds' global exposure and high income make it particularly attractive to trustees reaching retirement.

“The income yield on this strategy is still over 4 per cent,” he said, “but it’s based on free cash flow, rather than just targeting high dividend paying companies, which is a point of difference. We see it as more sustainable income.”

Last year, the fund achieved a 45 per cent return, Mr McKinnon said, noting the 48 per cent performance of the MSCI Global Equities Index by comparison.

“Under the circumstances of the type of strategy that’s focused on income and what we call shareholder yield, I think we were quite comfortable with that sort of return,” he said.