Recent analysis into SMSF investors has shown a growing preference for allocations to separately managed accounts (SMA) at the expense of listed shares as well as an increase in the use of exchange-traded funds (ETF) and unit trusts as avenues for access to international equities.
The September quarter results for OneVue’s SMSF holdings revealed fund flows to SMAs grew to 26.65 per cent, up from the previous quarter’s 26.22 per cent, while listed shares dropped to 28.21 per cent from 28.89 per cent.
OneVue chief executive of strategic relationships Brett Marsh said the trend out of cash and term deposits into growth assets had been playing out over the past 15 months.
“What was a surprise this time was the listed shares piece because they’ve generally been going up, but when it’s replaced by SMAs we can see there is an increasing number of people who are looking at moving into SMAs,” Marsh told selfmanagedsuper.
“We did see during the quarter a little bit of a shift as well where a few advisers who use us started selling down a few of their managed fund holdings and moving them into SMAs.”
Marsh said there had been good momentum for SMA providers this year.
“Advisers are taking more of an interest, so we’ve even seen some behavioural change from advisers who have traditionally used managed funds and even advisers who have traditionally used direct shares,” he said.
“We’ve seen people tip some money out of shares and funds into their SMAs.
“It’s still early days, but to see those changes happen at a greater rate than what we’ve seen before is certainly very encouraging.”
The trend out of cash and term deposits continued, decreasing to 25.06 per cent from 26.65 per cent, while allocations to unit trusts grew to 13.83 per cent from 13 per cent as investors moved into international equities.
“The one-year figures have been strong, so we have seen more assets into the unit trust, which was a little bit unexpected because these are SMSFs and they tend to have a bit more of a bias towards Australian equities, as opposed to international,” Marsh said.
“I think that’s the combination of strong markets in the United States and overseas, and the falling dollar has made some very good performance numbers and made [international] attractive.
“We continue also to get people investing in ETFs, so that comes through the listed shares piece.”
Direct property was also trending up and that would continue into 2014, he said.
“Some of the new advisers who’ve just started using OneVue since July/August have been attracted by a whole-of-wealth position, but they come from the property side of things,” he said.
“Most financial planners would be coming from a shares or managed funds perspective regarding their advice, whereas some of the advisers who are coming on board now are very strong in property so we’re seeing some of their business come on.”
He said he believed ETFs would be the main beneficiary from the shift out of defensive investments into more aggressive assets.
“I think ETFs are going to continue to benefit as there’s a lot of ETF innovation in the market and it’s not just different providers providing the same or similar products, it’s now different themes and indices,” he said.
“The theme we’ve seen over the last few quarters I expect will continue – more SMAs, more direct property and I still think direct shares will be a beneficiary as well.”
