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SMSFs stick with cash as rates continue to fall

By Cameron Micallef
31 December 2019 — 1 minute read

Despite the Reserve Bank of Australia reducing the official cash rate twice during the September quarter and effectively penalising savers, SMSF members have only marginally reduced their cash balances, according to official figures.

According to the ATO’s latest quarterly statistics, SMSF assets invested in cash and term deposits fell marginally from $155,118 million to $154,526 million between the June and September quarters.

The data also revealed that while cash has gone down marginally, SMSFs are investing more in property despite declines in property prices this year and new rules impacting LRBA holders.

As previously reported by SMSF Adviser, recent interest rate cuts have also had minimal effect on the SMSF lending sector as credit providers fail to pass on savings to investors.

In spite of this, assets invested in residential property jumped from $34,895 million in the June quarter to $35,024 million in the September quarter, while assets held in LRBAs increased from $42,913 million to $43,072 million between the June and September quarters.

Finally, the data showed SMSF investors are taking advantage of strong growth in Australian and overseas equities.

In the September quarter, SMSFs held $227,588 million in domestic listed shares, up from $224,371 million in June, while investment in foreign equities grew to $8,876 million in September, up from $8,751 million in the June quarter.

On a broader note, the statistics revealed that over 5,700 new SMSFs had been established in the September quarter, taking the total number of SMSFs up to 598,582.


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