Trustees continue to shun cash investments

Investments in cash deposits by SMSF trustees have dropped for a fifth consecutive quarter according to Multiport’s latest research.

The September Multiport SMSF Investment Patterns survey indicated cash investments dropped 1.1 per cent since the June quarter, with an overall decline of 5.8 per cent on the September 2012 quarter.

AMP’s SMSF administration head of technical services, Philip LaGreca, said the main reason for the fall was a “decrease in short-term deposits, which have fallen 0.6 per cent over the quarter”.

“As term deposits mature, the trend indicates they are not being rolled over as interest rates remain low and trustees look to other assets in search of higher returns,” he added.

The survey also indicated property accounts for 17.6 per cent of SMSF investment, down 0.5 per cent from the previous quarter.

“Overall though, property allocation is being out-stripped by growth in other sectors, mainly due to performance,” Mr LaGreca said.

“Around 38.7 per cent of all direct property holders had a borrowing arrangement in place, compared to 16.7 per cent of the total number of funds who have a borrowing arrangement, showing that gearing continues to be important for those who want to access direct property.”

In line with broader market growth, Multiport found allocations to Australian equities increased 1.9 per cent over the quarter to 39.4 per cent.

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