The average contributions figure for self-managed funds for the year ended 30 June 2013 was $35,200, representing a fall of $12,300 from the previous year’s average of $47,500, the latest “Multiport SMSF Investment Patterns Survey” revealed.
According to AMP SMSF administration head of technical services Philip LaGreca, the data indicated the effect of the concessional contributions cap reduction.
In addition to the reduction in contributions, the survey showed trustees were reallocating their cash holdings into other asset classes, in particular fixed income.
“While overall contributions were down for the year, it’s clear trustees are actively managing their investments throughout the year,” LaGreca said.
“A significant amount of cash holdings moved into the fixed-interest sector early in the financial year, with cash down almost 2.7 per cent and fixed interest up 2.6 per cent. The timing of these investments was heavily influenced by the reductions in official interest rates and sentiment about future movements and new capital raisings via bank-issued subordinated notes.
“The allocation to Australian shares was up 0.8 per cent to 37.5 per cent, slightly higher than expected from normal growth in the market. This was mostly driven by the significant weighting that direct Australian shareholders have in the top 20 stocks, which outperformed the All Ordinaries.”
The June quarter trends reflected much the same picture as the full-year results, with a 1.5 per cent decrease in cash holdings and cash allocations now making up 21.9 per cent of SMSF portfolios.
During the quarter, trustees directed 1 per cent more of their funds to fixed income, with the asset class getting a 12.2 per cent share of portfolios.
Australian equities allocations fell for the quarter by 0.6 per cent, eventually accounting for 37.5 per cent of the SMSF investment pie.
“Trustees generally make larger cash withdrawals prior to 30 June to meet minimum pension requirements for the year, but the continued downward trend for cash has more to do with lower interest rates making cash a less attractive investment,” LaGreca said.
Contributions for the June quarter were significantly higher ($13,050) than those of the March quarter ($6805), with the trend being in line with the usual practice of trustees wanting to maximise their contributions before the end of the financial year.
The survey is conducted quarterly and includes information from 1950 funds administered by Multiport.
