SMSFs largely unaffected by COVID-19

Self-managed superannuation funds (SMSFs) were largely unaffected by COVID-19 volatility and there was no flight to cash or large-scale liquidation of assets, according to a report.

Class’ latest SMSF benchmark report found SMSFs accounted for 1% of early release of super withdrawals, despite representing 26% of super assets.

Around 22,000 SMSFs withdrew from their fund using the scheme totalling $215 million.

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The report also found while SMSFs typically comprised of older Australians, there were an increasing number of young people using SMSFs as vehicles to grow their retirement.

“While females have made more contributions than men, there remains a gender gap. We can also see that more women under 25 are using SMSFs than their male counterparts of a similar age, indicating a renewed interest in SMSFs for both their performance and resilience,” Class said.

“Our data showcases a skew of males to overtake female SMSF members towards the older age brackets (70-85+). Interestingly, the data showcases that women aged 25 years old and younger are investing in SMSFs sooner than males aged 25 years and younger.”

The report also found asset allocation remained stable across the past two years and that US tech stocks and the big four Australian banks were popular investments.

“ETFs have grown for nine consecutive quarters and are now present in more than one quarter of all SMSFs – but the top 20 ETFs are owned by 53% of all funds, indicating concentration around similar themes. ETFs remain far more popular in SMSFs where members are under 25 years of age,” it said.

Source: Class

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