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SMSFs advised on capturing upside and downside trends to assess risk impacts on portfolio

Updated: Oct 7, 2021

by Tony Zhang Updated Jul 01, 2021

SMSFs simply comparing the success of a portfolio against benchmarks is useful but not sufficient if looking to build sustainably higher returns in a fund compared to the market, according to an investment management firm.

Investors “running their own money” or working in tandem with their financial advisers need to possess a deeper understanding of the performance of the portfolio in rising and falling markets, especially when it comes to equities, according to Insync Funds Management.

Insync Funds Management chief investment officer Monik Kotecha said, for those using specialist managers, trustees increasingly expect those managers to outperform the market when it is rising but protect them in falling markets. Otherwise, he noted they can just buy a benchmark cheaply and accept a constrained return without any real alpha contribution.

“This is important because, at the most basic level, a portfolio that falls less than the market is protecting member assets, and for people in pension phase, or getting close to retirement, that means a longer period before money runs out, or a higher living standard,” Mr Kotecha said

Equity Trustees Limited (“EQT”) (ABN 46 004 031 298), AFSL 240975, is the Responsible Entity for the Insync Global Quality Fund and the Insync Global Capital Aware Fund. EQT is a subsidiary of EQT Holdings Limited (ABN 22 607 797 615), a publicly listed company on the Australian Securities Exchange (ASX: EQT). This information has been prepared by Insync Funds Management Pty Ltd (ABN 29 125 092 677, AFSL 322891) (“Insync”), to provide you with general information only. In preparing this information, we did not take into account the investment objectives, financial situation or particular needs of any particular person. It is not intended to take the place of professional advice and you should not take action on specific issues in reliance on this information. Neither Insync, EQT nor any of its related parties, their employees or directors, provide and warranty of accuracy or reliability in relation to such information or accepts any liability to any person who relies on it. Past performance should not be taken as an indicator of future performance. You should obtain a copy of the Product Disclosure Statement before making a decision about whether to invest in this product.
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