SMSFs allocating less to cash

Self-managed superannuation funds (SMSFs) are allocating less to cash after a massive spike in the asset class in the last quarter of the 2017 financial year, with cash and short-term deposits dropping from 19.8 to 17.3 per cent from 30 June 2017 to 30 June, this year.

SuperConcepts executive manager of SMSF technical and strategic services, Phil LaGreca, said that these results, which were based on a SuperConcepts survey of 2,600 SMSFs with assets of $3.6 billion, “debunked the myth” that SMSFs just put money in the bank and leave it there.

“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.

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He said the spike in cash contributions at the end of last financial year was due to many trustees using their last opportunity to make large non-concessional contributions to superannuation, before reforms preventing them doing so came into effect.

Most of this money was then invested in the Australian equities sector, with, when performance was stripped out, the cash allocation to the sector increasing by 1.5 per cent due to investment from the reallocated cash.

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