Trustees' take-up of global equities spikes
Research spearheaded by AMP-owned admin firm Multiport has shown a jump in SMSF exposure to international shares.
The latest Multiport survey shows trustees are reducing their exposure to the top 10 stocks and increasing their allocations to international equities through the use of managed funds.
During the 2015 December quarter, there was a significant move away from the top 10 ASX shares by trustees, according to the Multiport SMSF Investment Patterns Survey.
The survey shows these top 10 shares now only account for 14.5 per cent of total SMSF assets, compared to 20 per cent in December 2014.
Investment in Australian shares overall has also seen a reduction, with Australian shares now representing 35.4 per cent of all assets held at 31 December 2015. This has reduced from 41.6 per cent in December 2014.
During this same period, investments in cash and short-term deposits increased from 16.5 per cent to 18 per cent of all assets held.
Multiport head of technical services Philip La Greca said trustees are searching for capital growth and yield outside of well-known stocks.
Mr La Greca said a large contributor to the increased allocation to international equities is likely to be distributions from managed funds at 30 June being re-invested during the December quarter.
“While it’s a positive sign of increasing diversification by SMSF trustees, it’s also reflective of the under performance of the ASX top 20 compared to the overall equity market for the period,” said Mr La Greca.
“Despite the increase in international investments, the most common assets held by SMSF trustees continue to be stocks in the ASX top 20, so there remains an opportunity for further diversification.”
There were a higher number of trustees increasing their cash reserves as a result of market volatility, he said.
The December 2015 quarter also saw a decrease in the average contribution per fund from $9,380 in the previous quarter to $6,393.
The average concessional contribution was $2,278 for the period, compared to $2,198 for the previous quarter, said the survey.