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Trustee interest spikes in ETFs, managed funds

Trustee interest spikes in ETFs, managed funds

Miranda Brownlee
10 March 2015 — 1 minute read

Overall allocation to ETFs and managed funds within SMSFs rose during the December quarter, according to recent research from Multiport.

ETFs now represent 4.2 per cent of total SMSF assets and managed funds at 19.5 per cent, according to Multiport’s SMSF Investment Patterns Survey for December 2014.

The survey, which covers 2,500 funds, showed over 29 per cent of non-cash investments are now made through pooled vehicles.

The results also indicated a decline in allocations to cash and short-term deposits with the asset class falling from 17 per cent in the September quarter to 16.5 per cent in the December quarter.

Allocations to international shares rose from 11.7 per cent in 2014 September quarter to 12.5 per cent in the 2014 December quarter, according to the survey.

AMP SMSF administration head of technical services Philip La Greca said investment in equities and managed funds is continuing to increase due to the low returns in other asset classes, especially cash and term deposits.

“There’s lots of opportunity for growth in the current market and SMSF trustees are adapting their portfolios to align to growth areas,” said Mr La Greca.

“In the December quarter we saw a significant rise in the amount of people using managed funds in their portfolio to increase exposure to international markets.”

Mr La Greca said domestic equities continue to be popular for SMSF trustees with the major banks and Telstra continuing to top the list of most commonly held investments based on dollars invested.

“For the first time, we’ve also seen an ETF enter the list of top ten investments, indicating the increasing use of pooled investments by SMSF trustees.”

Mr La Greca said the survey shows the trend of SMSF trustees deciding not to renew their term deposits has continued which is unsurprising given current interest rates.

The survey also indicated contribution amounts increased 92.3 per cent over a two-year period.

Based on the results, in December 2014 quarter the average contribution per fund increased to $13,715, up from $6,585 in the December 2012 quarter.

“The average contribution per fund is a positive sign that people are saving more for their retirement; this increase would also be influenced by the increase of the superannuation guarantee to 9.5 per cent and the effective use of contribution caps,” said Mr La Greca.

Trustee interest spikes in ETFs, managed funds
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