The Australian Securities Exchange (ASX) Managed Funds Service (AMFS) will provide SMSFs with an opportunity to introduce new ways of diversifying across a range of different asset classes.
The AMFS, formerly known as Aqua II, will allow fund managers to have their managed funds admitted to the ASX as settled products.
ASX head of customer and business development Ian Irvine said managed funds made available through the exchange would be useful for SMSF trustees.
“The top nine listed companies account for 50 per cent of the index,” Irvine told an ASX adviser session last week.
“Do they want to go back into the same nine or do they want to give [their portfolios] some diversification?
“The AMFS takes them to places they’ve not been before.”
He said if SMSF assets reinvested into ASX products that were confined to the top 50 listed stocks, SMSFs would still be highly concentrated.
“They’d still be 47 per cent invested in financials, 20 per cent in materials, 9 per cent in consumer staples, 6 per cent in energy and the large burgeoning telco industry,” he said.
He said the ASC would put more investment products on its “supermarket shelves”, particularly as SMSFs preferred to purchase assets directly.
“That’s our game plan – to make more available through this market because those 1 million trustees like us, which is really great,” he said.
The ASX was looking to build a greater investment menu for end investors, which would lead to asset allocation opportunities, and it was now focusing on how different product structures could evolve, he said.
“There are only 2200 listed companies, so you can start to create exchange-traded funds, government bonds or even exchange-traded options, which are traded under different rule structures,” he said.
“It could lead to multi-asset classes being available through the exchange.
“But also things like fixed income, alternatives, cash, property – things that aren’t easy to get through the exchange in a non-listed way, which we believe will lead to, with the assistance of advisers, better-constructed and better-protected portfolios to the end investor.”