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Self Managed Superannuation Funds: Theory and Practice

Journal of Law and Financial Management, Vol. 6, No. 1, pp. 8-22, June 2007

19 Pages Posted: 23 Apr 2008  

Peter J. Phillips

University of Southern Queensland - Faculty of Business

Abstract

In this paper, a small preliminary sample of self managed superannuation funds (SMSFs) is investigated. The contents of the actual SMSF portfolios are examined and a number of microstructure features that characterise the SMSF portfolios are described. These empirical characteristics are juxtaposed with theoretical and empirical finance to produce an analysis of self managed superannuation funds in theory and practice. A theoretical economic rationale for the existence of SMSFs is developed and microstructure features exhibited by the SMSFs such as home bias, under-diversification, high relative weightings of blue chip securities and the deployment of infrequent portfolio revisions (buy-and-hold strategies) are reported and discussed vis-à-vis theoretical and empirical finance. The outcome is a first step towards a more complete understanding of this increasingly important component of Australia's retirement income stream.

Keywords: Microstructure, Self Managed Superannuation Funds (SMSF)

JEL Classification: G11

Suggested Citation

Phillips, Peter J., Self Managed Superannuation Funds: Theory and Practice. Available at SSRN: https://ssrn.com/abstract=1123043

Peter J. Phillips (Contact Author)

University of Southern Queensland - Faculty of Business ( email )

Toowoomba 4350, Queensland
Australia

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