SMSF administration and software provider SuperConcepts has released the findings of the SMSF Investment Patterns Survey for Q4 2022. This report presents a quarterly analysis of SMSF investments to get a closer insight into how trustees invest and to identify emerging investment trends.
The survey covers over 4,400 funds, a sample of the SMSFs administered by SuperConcepts, and the investment they held at 31 December 2022 which exceeds $7 billion in assets.
SuperConcepts Executive Manager Technical and Strategic Solutions, Philip La Greca, said one of the key takeaways from this report is that fund managers are exploring different investment structures.
“Whilst pooled investment structures still have the lion’s share of international equities, it’s interesting to see that fund managers are branching into different structures to penetrate other sectors as well.”
La Greca questions whether we are going to see a resurgence in term deposits, as official interest rates rise.
“The trend suggests that term deposits will make a comeback for longer-dated sums,” he said, “as we’ve seen a 10% lift during Q4 2022.”
With the decreasing average age for an SMSF Trustee; expect to see significant change in the allocation of investments aligned to a younger demographic in the upcoming years. Investments such as ETFs prove to be on the rise, but the current environment has left SMSF trustees with few options in terms of investment choices for immediate liquidity.
La Greca said, “despite increasing official cash rate settings, short-term term deposits are still unattractive and not heavily used so, cash is king with little other options.”
Property continues to hold its own and, notably, nearly 85% of exposure to property is through direct with all growth in this sector attributed to this subset.
“It will be interesting to observe whether there is a reported decline here in our next quarter’s report as valuations for 30 June 2022 and later appear,” La Greca notes.
You can download a copy of the report here.
