SMSF cash wall continues to crumble

Self-managed super fund (SMSF) investors have increased their focus on global equities and exchange traded funds (ETFs) as the appeal of cash decreases, according to a survey conducted by Multiport. 

The Multiport SMSF Investment Patterns Survey showed investment in cash had continued to decline to 19.1 per cent of total holdings, down from 24.5 per cent one year ago. 

This decrease was largely due to the funds being moved into other sectors, specifically international equities, which rose significantly from 9.2 per cent to 10.8 per cent of total assets, according to AMP SMSF Administration head of technical services, Philip LaGreca. 

LaGreca said historically low interest rates meant SMSF trustees were looking for new investment opportunities to provide good returns. 

“Investment in exchange traded funds in particular has grown exponentially in the international equities sector, and has more than doubled in 12 months to 1.6 per cent of total holdings,” LaGreca said. 

Allocation to Australian equities increased only slightly by 0.1 per cent for the quarter, with the sector showing a decrease in the use of managed funds, down 0.6 per cent. 

Property holdings remained static over the quarter at 17.6 per cent, with direct property making up 14.1 per cent of SMSFs’ total allocation. 

The survey, which covers just over 2,000 funds, also found average SMSF contributions for the December quarter increased from $9,417 for the September quarter to $10,829.