Cash loses appeal for SMSFs
Falling interest rates towards the end of 2012 saw self-managed super funds (SMSFs) slightly decrease their cash holdings, according to a Multiport survey.
The quarterly Multiport SMSF Investment Patterns Survey found trustees were turning to fixed income and direct property investments as cash holdings fell 1.9 per cent in the December quarter to 24.5 per cent.
"With cash losing its appeal in the wake of two interest rate cuts for the quarter, SMSF trustees are looking for a new ‘safe' home for their investments," said AMP SMSF administration head of technical services, Philip LaGreca.
"About one third of cash outflows moved into fixed interest holdings — up 0.6 per cent for the quarter to 11.2 per cent of total SMSF investments — with trustees locking in higher interest rates through longer term deposits," LaGreca added.
However, average SMSF contributions for the September quarter decreased to $6585 compared to $8731 for the previous quarter.
This is in line with the trend shown during previous years, where the December and March quarters generally show the lowest inflow of new contributions for the year.
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