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New SMA ideal for SMSFs

Mason Stevens today announced the launch of the first-of-its-kind direct bond investment service via a separately managed account (SMA) structure, designed for advisers seeking to build cost-effective goals-based client portfolios.

The Mason Stevens Fixed Income SMA was created in response to growing adviser demand for direct access to bonds.

Retail investors now have the opportunity to directly hold a portfolio of fixed income securities in retail-sized parcels, professionally managed and serviced through efficient administration technology.

The SMA is actively managed by an experienced investment team that invests capital in a portfolio of Australian-denominated investment-grade bonds, subordinated debt securities, hybrids, asset-backed securities, residential mortgage-backed securities, floating rate notes and inflation-linked bonds.

Clients are able to invest with a minimum of $100,000.

“In this low-growth, low-return environment, we see more and more advisers allocating to fixed income – this is the case with advisers who are looking after the income needs of pre-retirees and retirees,” Mason Stevens managing director Thomas Bignill said.

“The strategy is also ideal for SMSF trustees who, based on ATO statistics, tend to have high concentration risk to equities.

“By investing in high-quality short to medium-term bonds, fixed income can potentially facilitate the preservation of wealth.

“Fixed income is about delivering consistency of income and that resonates with the end client – now they have the opportunity to further understand how it works through the transparency that a SMA brings.”

Despite the increased volatility experienced across the financial markets in the June quarter, the Mason Stevens Australian Fixed Income SMA delivered a quarterly return of 2.24 per cent, net of fees, as at 30 June.

This was 1.78 per cent above its benchmark target return of the Reserve Bank of Australia cash rate of plus 2 per cent.

To further assist advisers in building goals-based portfolios, Mason Stevens has developed a white paper that looks at the difference between investment objectives and financial objectives, in addition to how various investment structures can fulfil these objectives.

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