Self-managed superannuation fund (SMSF) trustees have increased their fixed interest asset allocations thanks to a rise in hybrid securities for increased income returns and investment opportunities, according to SuperConcepts.
A patters survey conducted by SuperConcepts showed that allocation toward the fixed interest sector is up from 12.2 per cent to 12.8 per cent, due to increased allocations toward hybrid securities.
SuperConcepts executive manager technical and strategic solutions, Phil La Greca, said: “The continued drop in interest rates… has led to increased interest in hybrids but investors are proceeding with caution as the security generally carries significant risk.”
Despite current figures, La Greca said that the new trend was likely to reverse off the back of the government announcement on superannuation changes.
“The continued decline in SMSF contributions this quarter is likely to be due to speculation at the time on proposed superannuation changes,” he said.
“We expect… contribution levels to start rising again; the number of financial asset loans also decreased by 16.9 per cent for the quarter.”
