SMSFs contribution levels fall as equity exposure shifts
Self-managed superannuation fund (SMSF) trustees have shown a strong bias for international equities increasing their allocation to the sector but remain tightly wedded to financial stocks within their local equity holdings.
At the same time they made significantly lower average contributions per fund, around 50 per cent lower, compared with the previous quarter possibly reflecting concerns around superannuation leading up to this year's Federal Budget.
The findings are part of the most recent Multiport SMSF Investment Patterns Survey, which covered the March quarter, and sampled 2250 SMSFs administered by the group.
The survey found that trustees had increased their allocation to international equities by around two per cent to 14.4 per cent and had decreased their allocation to Australian equities by the same amount to a year-low of 38.6 per cent.
AMP SMSF Administration Head of Technical Services, Philip La Greca, attributed the shift to increasing diversification among SMSF trustees stating they had taken profits from Australian equities and re-invest them into international shares mainly through pooled vehicles.
This was reflected in the top 10 equities holdings showing both the Magellan Global Fund and Platinum International Fund among Australian banking, resources and consumer good stocks.
"Due to the complexity of investing overseas directly, managed funds continue to be the preferred vehicle to invest overseas with 88.2 per cent of trustees investing in pooled structures," La Greca said.
According to the survey the big four banks are still among the most commonly held Australian equities within SMSFs with the Commonwealth Bank being the most commonly held stock, followed by Westpac Bank and ANZ.
However La Greca said while these stocks, and others like Telstra — which is also in the top ten — remain popular their overall allocation in SMSF portfolios has decreased from 19 per cent to 16.8 per cent during the March quarter due to the decrease in allocation to Australian equities.
The survey also stated that average contributions per fund decreased from $13,715 in the December 2014 quarter to $6120 in the March 2015 quarter.
While the March quarter typically had lower contribution amounts this decrease was the lowest in the past two years, below the March quarter contribution figure of $7587 for 2014 and $6805 for 2013.
AUTHOR
Jason Spits
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