Surely the current franking arrangements for domestic shares are up for reform as part of the white paper process. With that tax subsidy being put into question, is it time for SMSF's to look further afield?
The average SMSF investor invests 31 per cent of his fund in domestic listed shares compared with the professional fund managers who allocate about 24 per cent to domestic listed shares. Another difference between the individual investor and the professional is that 29 per cent of SMSF money is invested in cash and term deposits compared with 14 per cent for all super, although the professional does invest 20 per cent of his funds in domestic and international fixed interest instruments, which is the equivalent to parking it in cash these days. But perhaps the biggest difference is that rather amazingly, considering the fall in the Australian dollar, , only 0.5 per cent of SMSF money is invested in international shares, compared with 22 per cent of all the superannuation assets managed by professional fund managers.