Industry super fund Hostplus is continuing to use its scale to provide SMSFs with access to unlisted assets and wholesale investment opportunities and enhance the diversification characteristics of trustees’ portfolios.
Hostplus Self-Managed Invest (SMI) allows SMSFs to use the organisation’s structure to make portfolio allocations alongside those of the public offer fund using the same investment options available to its members.
To this end, Hostplus is looking to allow SMSF members to enjoy the benefits arising out of the industry fund’s scale.
“We have really strong net cash flows. We get around $5 billion of inflows each year coming through. What that does is it allows us to identify the best investment opportunities and take a longer-term view on those,” Hostplus intermediary distribution and growth executive manager Lisa Palmer told attendees at SMSF Professionals Day 2024 co-hosted by selfmanagedsuper and Accurium in Brisbane on Tuesday.
“We deploy funds really quickly and that means we can take advantage of opportunities as they arise.
“Also, scale gives us the ability to negotiate better fees and terms with our managers and it also enables us to have a relatively high allocation to unlisted assets.
“What that means is your SMSF clients have the ability to leverage that expertise and scale and even though we have a larger portion of our portfolios, around 40 per cent, in unlisted assets, you receive daily liquidity. Our scale and size enables that.”
According to Palmer, the significant allocation to unlisted assets allows Hostplus to invest in sectors of the market retail investors have historically had difficulty accessing. These include asset classes such as venture capital and infrastructure, as well as some highly specialised offerings from fund management houses.
Further, she pointed out the allocation to unlisted assets lowers risk by facilitating an additional element of diversification to the public offer fund’s portfolios, and can do the same for SMSF investors. This is because these assets behave differently to those that are publicly traded and do not possess the same level of volatility.
Palmer took the opportunity to explain SMSFs using SMI do so through a pooled super trust structure meaning all of the income distributions are included in the platform’s unit pricing.
“It means we have different classes for both the accumulation and the pension environment so the integrity of the tax treatment for individuals in each of those circumstances remains,” she said.
Hostplus provides dedicated support services for advisers with clients using SMI and the minimum investment amount required to access the feature is $10,000.
