SMSFs looking to mid to small cap stocks
Self-managed superannuation fund (SMSF) trustees have reduced their exposure to the Australian securities exchange (ASX) top 10 stocks by six per cent in the March quarter, according to SuperConcepts data.
The firm's SMSF investment patterns survey said the reduction from 20 per cent of fund assets invested in 2015 to 14 per cent in March was a result of trustees looking to diversify amid volatile conditions.
SuperConcepts executive manager for technical and strategic solutions, Phil La Greca, said rather than investing in different asset classes to diversify, trustees were investing in mid and small cap stocks on the ASX.
The survey found the trend to invest in other stocks saw the overall allocation to Australian shares increase marginally from 35.4 per cent to 35.8 per cent over the quarter.
"There still remains an opportunity to further improve diversification with SMSF trustees continuing to be heavily weighted in domestic equities," La Greca said.
"Over the past two years, we've seen the amount invested in cash continue to increase with many trustees deciding not to renew term deposits in the current low interest rate environment."
He noted that contribution levels to SMSFs in the quarter were at the lowest level in two years with the average contribution inflow per fund at $5,426, down from $6,393 the previous quarter.
"While we typically see a decline in SMSF contributions during the March quarter, this year has been particularly low. This could be a result of concern about speculation on proposed superannuation changes which was top of mind for many trustees during the quarter," he said.
Recommended for you
Australian fund managers are actively seeking to launch Cayman versions of their funds to attract offshore flows, with Regal Partners set to launch its latest offering this month.
As private markets gain traction in Australia but only a limited pool of talent is available, three recruiters explore whether fund managers should consider looking overseas to find top talent.
With an explosion of private credit managers appearing in the market, two alternatives experts believe a consolidation is needed to maintain the quality of the sector.
Bentham Asset Management has become the latest fund manager to expand its distribution team as it reports increased interest in its credit strategies.
