SMSF money on the move

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SMSF trustees are making significant changes to their asset allocations compared to previous years, according to the latest industry research.

The “2017 Vanguard/Investment Trends Self-Managed Super Fund Reports” found more SMSFs are making substantial changes to their asset allocation, the highest level observed in the research’s seven-year history.

While more SMSFs shifted their asset allocation to ‘more defensive’, from 107,000 in 2016 to 114,000 in 2017, the number adopting a ‘more aggressive’ stance also grew strongly to 57,000 SMSF investors from 37,000 in 2016.

A further 37,000 SMSF investors classified themselves as ‘ambivalent’, that is, those who were both more aggressive and more defensive when it came to changes to their asset allocation, while 38,000 provided other reasons.

“Digging deeper into this, those with a more aggressive stance have done something differently to their portfolios than those that have taken a more defensive stance,” Investment Trends head of wealth management research Recep Peker told media at the launch of the report this month.

“For those who are going for more growth – and there’s a common theme here where SMSFs feel that they need a lot more growth in their portfolios now – they are using managed investments more.

“This would be things like managed funds and exchange-traded funds, which have increased as a share of their total dollars.”

While the 2017 research did not touch on the frequency of trustees changing their investments, data from the 2016 report revealed most trustees, 85 per cent, reviewed their SMSF’s investment strategy in the 12 months to March 2016.

Investment Trends senior analyst King Loong Choi told selfmanagedsuper: “Just under half of SMSFs, 47 per cent, determine their SMSF’s asset allocation by their SMSF’s investment strategy set up when the SMSF is first established.

“The data found 20 per cent of trustees use a financial adviser, while 20 per cent use an email investment newsletter.”

The research was based on online surveys conducted between February and March.

Responses from 3020 SMSF investors, 479 SMSF financial planners and 945 SMSF accountants were analysed as part of the research.

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