Cash holding in self-managed super funds (SMSFs) increased two percentage points in the December quarter from 24.7 per cent to 26.7 per cent, the highest level in two years, according to the latest Multiport Investment Patterns Survey.
Fixed interest holdings fell again, down from 14.1 per cent to 11.5 per cent, while Australian shares shrunk for the fourth consecutive quarter, from 36 per cent to 35.4 per cent despite the market rising in the December quarter.
This may indicate a degree of profit taking as well as redemption due to market volatility, according to Multiport.
International shares grew slightly from 7.7 to 7.9 per cent, alternative assets including hedge funds grew from 0.5 to 1.1 per cent of total holdings, and property was up from 16.8 to 17.6 per cent – its highest level since December 2008.
This reflects the ongoing acquisitions in the asset class and the use of gearing strategies, Multiport stated.
Multiport chief executive John McIlroy said that, contributing to the increase in cash holdings, a significant number of longer-duration term deposits that matured in the quarter had not been rolled over.
He attributed this to the consecutive interest rate drops and investor uncertainty about where interest rates will go in 2012.
"This uncertainty is leading to more money going into shorter terms and cash," he said.
The average contribution inflow for the quarter was down significantly on the previous quarter to $6,980, with the bulk of contributions coming in the June quarter.
There were greater outflows for the quarter, with $10,800 per fund paid out in benefits and pension payments, McIlroy said.
