2008 Fund Performance

Unfortunately, and as predicted last year, we had a lousy return of -17.3% for 2008. Whilst not unexpected and probably reasonable given the carnage on the share market, it is nonetheless disappointing. However, we have no intention of following the herd and selling out given that we feel the companies we are invested in are good quality and their performance will reflect that in the longer term.

But stay tuned for 2009 when I expect the result to be far worse...

Holdings include shares in the following companies, managed funds, listed and unlisted trusts and derivatives:

• ARB Corporation
• Asciano Group (split out from Toll)
• Austgrowth Property Syndicate No 23 (St Kilda Road)
• BHP Macquarie Self Funding Instalment Warrants
  
• BlueScope Steel
• ConnectEast Group
• Macquarie Equinox Class C
• Macquarie Group Limited
  
• Mirvac Real Estate Trust (formerly JF Meridian Trust)
• National Australia Bank
• OM-IP 140 Plus (Aud) Limited Fund (Man Group)
  
• OrotonGroup
• QBE Insurance Group
  
• The Reject Shop
• Toll Holdings
• Virgin Blue Holdings
  
• Wesfarmers Macquarie Self Funding Instalment Warrants
• Woolworths Macquarie Self Funding Instalment Warrants

2007 Fund Performance

In typical fashion I have neglected to post information to this blog until way after the event. In that vein, the Bainsworld Superannuation Fund produced an investment earnings rate for 2007 of 42.7%, a huge improvement on 2006 as we predicted it would be. Some of our investments didn't do so well the previous year and so when the market supercharged, they grew much faster than you might otherwise have expected. No doubt that will be reflected in reverse with the 2008 market downturn.

Holdings include shares in the following companies, managed funds, listed and unlisted trusts and derivatives:

• ARB Corporation
• Asciano Group (split out from Toll)
• Austgrowth Property Syndicate No 23 (St Kilda Road)
• BHP Macquarie Self Funding Instalment Warrants
  
• BlueScope Steel
• ConnectEast Group
• Macquarie Equinox Class C
  
• Mirvac Real Estate Trust (formerly JF Meridian Trust)
• National Australia Bank
• OM-IP 140 Plus (Aud) Limited Fund (Man Group)
  
• OrotonGroup
• The Reject Shop
• Toll Holdings
• Wesfarmers Macquarie Self Funding Instalment Warrants
• Woolworths Macquarie Self Funding Instalment Warrants

We disposed of our Alinta shares after holding them for 3.4 years as Babcock and Brown made an offer too good to refuse. The After Tax Internal Rate of Return on this investment was 41.7%, not too shabby.

2006 Fund Performance

I just noticed that I forgot to post last year's results for the Bainsworld Superannuation Fund. Our investment earnings rate for 2006 was 11.7% which seems a little low given the way the Australian market has been performing of late. Still we think that 2007 will be an improvement on this.

Holdings include shares in:

• Alinta
  
• ARB Corporation
  
• BlueScope Steel
• ConnectEast Group
  
• JF Meridian Trust
  
• National Australia Bank
• OrotonGroup
• The Reject Shop
• Toll Holdings

We also have a number of managed investments and units in an unlisted property trust.

The standout performer in our portfolio is The Reject Shop (ASX code TRS) which has been growing at a compound annual growth rate of 100% - yes, it has doubled in value every year for the four years we have held it!

2005 Fund Performance

We have just completed our accounts for 2005 and I'm happy to report that the Bainsworld Superannuation Fund returned 17.5% to its members after tax and all expenses for the last year. Not too shabby given that today's Australian Financial Review Quarterly Review of Funds liftout lists the performance of the Top 20 super funds ranges from 10.7% to 13.9%. Its steady as she goes for now although we are probably holding a bit too much cash. It has been difficult to find good value propositions in the market but all we have to do is be patient and eventually, the market will cough up some opportunities.

Super Fund Management Software

BGL Corporate Solutions Pty. Ltd. This is the developer of Simple Fund, the software we use to administer our SMSF. It is a bit more high-powered than we need as it is designed for accountants to manage multiple funds on behalf of their clients including doing audits and submitting tax returns. However, once I got my head around debit/credit (it is not as user friendly as say, MYOB) when entering the various transactions, it is easy to use and provides very comprehensive reporting. I do my own accounts using Simple Fund and submit the reports to my accountant along with the physical documentation (bank, share trade and dividend statements etc). He does the audit and prepares and submits the fund's tax return for about $770 which is pretty good value. Simple Fund has an annual license fee which is about $300 a year. So including the ATO fee, it costs not much more than $1,100 for us to run our Super Fund - less than 1%, very low fees indeed.

Register of Complying Super Funds

(ROCS) - Register of Complying Super Funds This contradicts one of my earlier postings - there actually is a register of superfund names and this is it! So you can come up with a unique name but there is no guarantee that it will remain so.

DIY Super Trust Creation

Self Managed Superannuation These guys recommended to me by a friend as an inexpensive way of creating an SMSF - only $473 plus stamp duty! My accountant uses a different company which is cheaper but ends up being $700 after he does his bit as well. I guess if you feel you know enough about your needs to brief someone yourself you use one of these companies (and there are lots and lots of them) otherwise you get an "adviser" to ensure you get what you need. Of course you pay a little more but not much in the scheme of things.

SISA Legislation

SUPERANNUATION INDUSTRY (SUPERVISION) ACT 1993 If you really want to dive into the deep end, here is the dreaded SISA!

ASFA

ASFA - Small/DIY funds - Menu The Association of Superannuation Funds of Australia Limited has advice for Trustees and a pretty good summary of the issues of running your own fund. Check it to see if it is really your style before taking the plunge. Also has some stats about small and DIY funds collected by APRA in January 2003:

246,000 small funds

430,000 members or average 1.75 per fund

$99 billion in assets or average $230,000 per fund

Taxpayers Australia

Taxpayers Australia Superannuation Australia is a subsidiary of Taxpayers Australia and is headed up by Barbara Smith, a prolific superannuation author. They produce a DIY Super Manual (how to do it) and Update service (alert you to how changes in SISA will affect your fund) and some other tools. They are an agent for the Simple Fund software from BGL as well. You can also purchase a Trust Deed with instructions for tailoring to your needs. A good source of information, books and tools for anyone who really wants to "do it yourself".