SMSF borrowing shifts to financial assets
A Multiport survey of 1,600 self-managed superannuation funds (SMSFs) has found trustees using limited recourse borrowing arrangements moved away from property and towards financial assets in the June quarter.
Multiport found that since the March quarter there had been a 4 per cent move towards financial assets.
Multiport suggested that the increase in financial asset borrowing could be attributable to the current lull in the stockmarket, with aggressive trustees looking to leverage their holdings in anticipation of a recovery.
Another factor noted by Multiport was the shorter and less complicated process involved in borrowing for financial products, as opposed to property.
As at 30 June 2011, property loans made up 52 per cent of SMSF trustee borrowing and financial asset loans made up 48 per cent.
14 per cent of the funds surveyed in the Multiport research are currently utilising a borrowing arrangement.
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