The latest SuperConcepts SMSF Investment Patterns Survey covering the final quarter of 2022 has shown trustees are returning to cash products for their liquidity needs.
According to SuperConcepts Executive Manager Technical and Strategic Solutions Philip La Greca the shift back to term deposit allocations is the result of very few other liquidity options available to SMSF members.
“We’ve seen a 10 per cent lift in extended term deposits during Q4 2022, and it would appear short-term term deposits are still unattractive for investors,” La Greca noted.
The study also indicated direct property has retained its popularity among SMSFs with 85 per cent of allocations to this asset class accessed in this manner.
However, La Greca was unsure as to whether this sentiment would be reflected in the next quarter given the downward movement in real estate values seen in recent months.
“It will be interesting, however, to observe whether there is a reported decline here in our next quarter’s report as valuations for 30 June 2022 and later appear,” he said.
Further the analysis recognised the desire of fund managers to play a larger part in the investment activities of SMSFs and not be restrained by the traditional role they have fulfilled in the past.
“While pooled investment structures still have the lion’s share of international equities, it’s interesting to see that fund managers are branching into different structures to penetrate other sectors as well,” La Greca revealed.
The data confirmed cryptocurrencies and collectables are still not having a significant impact on SMSF portfolios with holdings of those types of assets accounting for 0.1 per cent of the total investment pool.
La Greca pointed out SMSF portfolio construction could experience a significant change in the coming years due to the larger number of younger Australians now establishing their own retirement savings vehicles.
The SMSF Investment Patterns Survey examined the assets of more than 4400 funds SuperConcepts was servicing as at 31 December 2022 with a total value of over $7 billion.
