Pension SMSFs that invest in property lean heavily towards commercial property when compared to funds in accumulation phase, a new report has found.
The Class “December SMSF Benchmark Report” revealed investment in commercial property sat at 63 per cent for pension SMSFs and 37 per cent for accumulation SMSFs.
When it came to residential property, accumulation SMSF investment was at 54 per cent, while pension SMSFs were at 46 per cent.
Accumulation funds were also 12 times more likely to borrow money to chase residential yields.
“Perhaps this is another example of pension funds’ need for income as commercial properties deliver a more reliable and higher rental yield,” the report said.
“Retirees do indeed have a different investment profile to investors in accumulation phase – they need more income to live off and seem to be more risk averse than pre-retirement investors.
“The clear differences in investment preferences of the pension SMSFs will be interesting to watch over time.”
The report, released last week, also highlighted SMSFs in pension phase were attracted to higher-yield stocks overall when compared to funds in accumulation phase.