Global update: Lonsec returns (Young v2)

Overview

Our default assumptions for some returns have been updated based on Lonsec’s recently published document, '2023 Lonsec Capital Market Assumptions’. These include changes to the capital growth and income distribution rates for Shares/managed funds, and interest rates for Cash, Fixed interest, and Loans.

These returns will automatically be applied when you add one of the aforementioned assets/loans in new cases. On the other hand, returns in existing cases will not convert to these new assumptions - so, for example, you can be sure the home loan interest rate you entered is not overwritten.

If you would like for an existing case to use our new Shares/managed fund returns, contact us at support@optimofinancial.com.au with the name of your case. Meanwhile, you can edit the the interest rates for Cash, Fixed interest, and Loans yourself using the Interest rate field.

Shares/managed funds

See the table ‘Shares/Managed fund returns (directly owned or in an SMSF)’ for our new values: https://help.optimopathfinder.com.au/userdocs/web/optimo-financial-default-assumptions.

A notable change involves Australian equities (direct and trust), where franking has increased to 85% (previously 75).

Cash and Fixed interest

Interest rates (%p.a.) for cash and fixed interest have slightly increased about 0.8 percentage points from last year.

Loans

Our default interest rate for Self-managed super funds limited recourse borrowing arrangements (SMSF LRBA) interest only loans has been increased to 10%p.a. This is due to the ATO’s LRBA minimum interest rate increase for 2023/24 from 5.35% to 8.85%.