Self-managed super fund (SMSF) trustees have boosted exposure to managed funds in the wake of continuing interest rate drops.
Multiport’s March SMSF Investment Patterns Survey found a renewed interest in the managed funds sector, which increased for the first time in two years to 17.4 per cent from 15.8 per cent in the December quarter.
“A lot of what is happening is the issue of [investors] trying to find a home for their money,” AMP SMSF's administration head of technical services, Phillip LaGreca said.
“Obviously cash has been relatively popular, but when you consider the amount of cuts that we’ve seen to official interest rates over the last period, we’ve seen that trend starting to come down.”
The report found that managed funds within the fixed interest and Australian equities sectors saw the largest increases over the quarter.
Mr LaGreca said SMSF investors are moving to the managed fund sector so they can be selective in the type of assets they are purchasing.
“I think what has driven this particular element is that there has been this build of investors saying, ‘OK, I still want to be in control in the sense of wanting shares but I just want particular parts of the market’,” Mr LaGreca said.
“There is probably a bigger use of some of the less traditional managed funds, as in investors are not buying an Australian share fund but they might be buying a small caps fund or a particular sector rather than just buying the index.”
The move towards managed funds coincided with a dip in the number of longer term deposits held by SMSF trustees, which decreased from 2 per cent last quarter to 1.4 per cent at the end of March.
Despite this, the survey found that fixed interest remained steady over the quarter at 11.2 per cent.
“We’ve seen [fixed interest] become fairly flat and obviously there has been a little bit of movement in the sense that the sector overall hasn’t changed…. but the parts of it that are being used have changed over time,” Mr La Greca said.
“And certainly, now the swing is around the short-term deposit rather than the long-term ones.”
SUBSCRIBE TO THE SMSF ADVISER BULLETIN
23 Jun 2017Trustees reminded of ‘positive’ CGT news as EOFY loomsBy Katarina Taurian
23 Jun 2017SMSF practitioners told to reassure clients in 30 June lead upBy Miranda Brownlee
23 Jun 2017SMSFs warned on 30 June cut off for electronic transfersBy Staff Reporter
22 Jun 2017Westpac veteran and SMSF exec set to departBy Staff Reporter
22 Jun 2017ATO sets compliance targets for auditors in 2017-18By Miranda Brownlee
22 Jun 2017CGT relief still plaguing trustees, says former ATO execBy Miranda Brownlee
- view all
Trustees reminded of ‘positive’ CGT news as EOFY looms
A capital gains tax (CGT) issue that was causing confusion in the industry has been cleared up by the ATO, and professionals are being remin...read more
SMSF practitioners told to reassure clients in 30 June lead up
With the focus predominantly on super members with above $1.6 million, it may be worth practitioners informing clients unaffected by the ref...read more
SMSFs warned on 30 June cut off for electronic transfers
With a significant portion of Australians missing the 30 June cut off last year when making non-concessional contributions, Colonial First S...read more
- view all