SMSF trustees losing faith but shares still best: HLB

Self-managed super fund trustees have lost faith in investment markets and are increasingly turning to property and cash-related products such as term deposits, but the best long-term rewards still look to be in equities, according to HLB Mann Judd Sydney.

HLB Mann Judd Sydney head of wealth management Michael Hutton said there is a feeling that things might start to pick up and markets might start to behave more normally.

Wealth management manager Chris Hogan said that although a guaranteed 6 per cent from a term deposit might seem appealing in the current environment, it was important to still hold some Australian equities. 

With interest rates easing, rolling over term deposits will likely result in rates dipping down towards 5 per cent or lower, but with equities you can get around 6 per cent through the dividends, plus extra income from the franking credits. If the shares increase in value to go with the dividends, they could feasibly return around 12 per cent for the foreseeable future.

Wealth management partner Jonathan Philpot said many trustees had discarded their long-term plans and taken a short-term view. While many had stood firm following the global financial crisis, the ongoing market volatility had eroded the resolution of all but the strongest.

But he encouraged trustees to take a 10-year view. "All the bad news is short-term impact. Over the longer term, there is time to recover and investment returns will smooth out," he said.