SMSF cash balances not ballooning: BGL

SMSF cash balances have increased in the past year but are not at an all-time high as is often suggested, according to latest research from BGL Corporate Solutions.

BGL found cash balances increased 3.35% on 31 March 2018 as compared to a year earlier.

However, the cash to total investment ratio showed cash balances have decreased 0.84% over the period, BGL managing director Ron Lesh said.

"This is certainly not a substantial increase as suggested by others in the industry and could even simply be a timing issue - Easter was much earlier this year," he said.

Overall, cash represented about 20% of SMSF assets in both 2017 and 2018.

The SMSF administration software developer looked at cash balances of the 140,000 funds hosted on its platform - in an analysis Lesh said is "reasonably representative" of the SMSF sector.

"And while I am not a great supporter of a lot of the SMSF statistical analysis bandied around by some, with our software covering 23% of all SMSFs, I think our figures are reasonably representative," he said.

Last week, a report by Vanguard and Investment Trends found the amount of cash held by SMSFs declined for the first time since 2009, coming down to $174 billion in 2018 from $184 billion the previous year.

Of this, $50 billion was considered "excess cash", meaning the level of an SMSF's assets that are currently in cash due to recent market volatility.

Read more: CashSMSFBGL Corporate SolutionsInvestment TrendsRon LeshVanguard
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