SMSF cash allocation dips

Self-managed superannuation funds are increasingly shifting away from cash to Australian equities, latest SuperConcepts figures show.

Cash and short-term deposits dropped from 19.8% to 17.3% in the 12 months to June 2018, according to SuperConcepts' survey of 2600 SMSFs.

Executive manager of SMSF technical and strategic services Phil LaGreca said this money was mainly invested in the Australian equities sector.

LaGreca said the findings debunk the myth SMSFs put money in the bank and leave it there - it clearly shows SMSFs are active investors.

"The data confirms that SMSFs are drawn to wanting control over their investment strategies and they are highly engaged in putting their money where they want it," LaGreca said.

Changes to the contribution rules could also explain the shift, as many trustees took their last opportunity to make large non-concessional contributions to superannuation, he added.

CommSec also released its latest SMSF trading report this week, showing SMSF investors are increasingly turning to international equities for greater diversification and returns.

Amazon, Apple, Facebook, Tesla and Berkshire Hathaway are the top five international stocks by trading value, while Alphabet Class A replaces Tesla in the top five when it comes to holdings.

"This trend to add international shares is strong among SMSFs who often use a core portfolio of Exchange Traded Funds (ETFs) or managed funds for diversification, then add high conviction individual stocks such as Facebook, Amazon, Apple, Netflix, Google or Berkshire Hathaway in an effort to enhance performance," Commonwealth Bank head of SMSF customers, Marcus Evans said.

CommSec found demand for international LICs and LITs is also on the rise.

Between January 2018 and June 2018, the value of LIC and LIT trades executed by SMSFs rose from 23% to 26%, CommSec said.

Read more: SMSFCommSecSuperConceptsBerkshire HathawayFacebookPhil LaGrecaCommonwealth BankExchange Traded Funds
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