SMSFs consistent in asset allocation
Self-managed superannuation fund (SMSF) asset allocations have remained largely consistent over the years with a bias towards Australian investments, according to the SMSF Association.
The highest allocation percentage for the year to 30 June 2016 was towards Australian listed shares (30 per cent), followed by cash and term deposits (26 per cent), and listed and unlisted trusts and other managed investments (19 per cent). Overseas investments accounted for one per cent.
The year to 30 June 2011 was similar with Australian listed shares at 31 per cent, followed by cash and term deposits (28 per cent), and listed and unlisted trusts and other managed investments (18 per cent).
SMSF Association head of technical, Peter Hogan, said while critics of SMSF trustees' asset allocation pointed to a lack of diversification, they often highlighted the absence or low allocation to assets such as international equities.
He said they were forgetting SMSFs were getting exposure to these assets through exchange traded funds (ETFs), listed and unlisted trusts and managed funds.
"Although in recent times, the predominant asset allocation of SMSF trustees has not performed as well compared to alternative funds, it is still within reach. APRA statistics for the 2015 financial year, for example, show the return for SMSFs after expenses (excluding contributions) to be 5.7 per cent. This compares with non-SMSF returns of 8.5 per cent for the same period," Hogan said.
"These returns do not support the suggestion that SMSF trustees are dangerously out of their depth or incompetent in investing their members' superannuation balances."
Hogan noted that many SMSFs were in pension phase and therefore had more defensive investment portfolios to suit their needs.
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