Self-Managed Superannuation Funds (SMSFs) are not moving heavily into the direct residential property sector holding on average only seven per cent of their total holdings and instead opting for cash and equities as their dominant investment assets.
Collectively cash, equities and managed funds account for 73 per cent of the average SMSF investments with other forms of property outside directly held residential — such as listed and direct commercial — accounting for an average holidng per fund of four per cent each.
The portfolio make-up of SMSFs was confirmed as part of the research conducted and released by the Financial Services Council and UBS in their joint State of the Industry Report, released yesterday.
The research surveyed the demographics and portfolio holdings of six hundred SMSF holders nationwide during early October and found that cash was still the predominant asset held by SMSFs representing 35 per cent of a typical portfolio while Australian equities made up 23 per cent of the portfolio and managed funds 15 per cent.
The report stated portfolio allocations were skewed towards these three areas when balances were lower and moved towards higher investments in trusts and property as fund balances increased.
"That said, however, residential property and more esoteric investments such as valuable artworks rarely form more than five per cent of the investment mix regardless of the size of the SMSF," according to the report.
The report also stated that there was "very little foreign investments of any kind held in SMSFs across the board, which is noticeably different to the larger Australian Prudential Regulation Authority (APRA) regulated industry and retail funds" but that 15 per cent of SMSF fund holders considering diversification were looking at international equities.
The report also stated that 12 per cent of SMSF fund holders were considering diversifying into shares in infrastructure companies and that with $546.9 billion invested in SMSFs there was a potential pool of $54.69 billion available for investment in companies or equity providers in this sector.
