SuperConcepts has released the SMSF Investment Patterns Survey for the December quarter, which covers 4,400 funds and the investments they held at 31 December 2022.
The survey indicates that Australian equities continue to be the dominant asset class for SMSFs, with Australian equities representing 38.8 per cent of SMSF assets.
The majority of SMSF investors still invest in Australian equities through direct investments. Direct Australian shares account for 30.3 per cent of the total SMSF investment pool compared with managed funds and ETFs at 6.3 per cent and ETFs at 1.5 per cent.
While there has been a small decline in the allocation towards Australian equities, SuperConcepts executive manager technical and strategic solutions Philip La Greca said this is mainly due to market performance.
Managed funds and ETFs are far more popular for SMSFs investing in international equities, said Mr La Greca, with almost 80 per cent of international equities invested it through pooled structures.
“It’s interesting to see that fund managers are branching into different structures to penetrate other sectors as well,” he said.
Property remains the second biggest asset class for SMSFs, representing 16.4 per cent of the total investment pool.
“Nearly 85 per cent of exposure through direct holdings and all growth in this sector is attributed to the direct subset,” said Mr La Greca.
“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.”
In terms of liquid investments, Mr La Greca said that “cash remains king” with short-term depots still unattractive and not heavily used.
“There has been some use of other pool structures to try and achieve higher rates of return but this is also limited, resulting in most liquidity being managed through cash at bank,” he said.
With the decreasing average age for an SMSF trustee, Mr La Greca said there will likely be a significant change in the allocation of investments aligned to a younger demographic in the upcoming years.
