SMSF trustees are looking to make the most of the current superannuation rules by significantly increasing their non-concessional contributions (NCC), the latest SuperConcepts “SMSF Investment Patterns Survey” has found.
The survey revealed contribution levels almost tripled in the December quarter 2016, increasing by 181 per cent from $3040 in the September quarter to $8550.
The rise in contributions comes prior to the introduction of the government’s major changes to superannuation on 1 July.
SuperConcepts technical and strategic solutions executive manager Phil La Greca said the findings were unsurprising and anticipated contribution levels would continue to increase during the next two quarters due to the brief window of time to make large NCCs.
“The current non-concessional amounts apply for the remainder of this financial year and investors are taking advantage of the limited time available to them,” La Greca said.
“We expect a continued uplift in the level of NCCs in the lead-up to 1 July.”
The current $180,000 after-tax contributions cap and the three-year bring forward rule remain until 30 June.
The survey also found cash levels were up from 18.1 per cent in the September quarter to 18.4 per cent in the December quarter.
La Greca said it was likely the increased cash levels were related to the higher level of contributions being received.
The data also revealed the trend to invest through the use of exchange-traded funds (ETF) continued to grow, with ETFs representing 4 per cent of all assets during the December quarter.
ETFs were mostly used in the international equity sector, representing 16.7 per cent of all international equity holdings.
The trend to use limited recourse borrowing arrangements for property also continued, the survey found.
The overall allocation to property loans increased to 81 per cent in the December quarter, up from 75 per cent the previous quarter.
Meanwhile, the number of financial asset loans increased from 19 per cent to 25 per cent, quarter on quarter.
The survey covers around 2800 funds, a sample of the SMSFs that SuperConcepts administers and the investments they held at 31 December 2016.
The assets of the funds surveyed represent just under $3.2 billion.
