Federal Budget: 3 things for SMSF investors to consider
Low interest rates and superannuation reform will affect SMSF trustees
In this video, Shane Oliver, Chief Economist and Head of Investment Strategy at AMP Capital highlights the key Federal Budget considerations for SMSF investors.
There are three things that SMSF trustees should bear in mind in response to the Budget:
- This Federal Budget marks a big difference to the one we saw two years ago: similar to last year, the 2016-17 Budget is a lot friendlier for the average Australian. There’s less of a negative impact on confidence – we don’t see a huge macroeconomic impact flowing through to domestic asset classes. This suggests that there’s no need to radically change your investment strategy on this front.
- Superannuation reform: The main impact from the Budget will come from the announced superannuation changes; which a quite complex. It may be worth getting advice in relation to these changes as they may have a big impact on your strategy going forward.
- Low-interest rate environment: The Reserve Bank of Australia has cash rates to a record low. This will push bank deposit rates down to the lowest level since the 1950s – down around 2%, possibly even lower. Therefore, the pressure remains on the part of SMSF trustees to find better yielding investments than bank deposits – without assuming too much volatility in terms of the underlying value of the investment.
About the author
Shane Oliver, Head of Investment Strategy and Economics and Chief Economist at AMP Capital is responsible for AMP Capital's diversified investment funds. He also provides economic forecasts and analysis of key variables and issues affecting, or likely to affect, all asset markets.