• Concern levels among SMSF trustees retrace as the market shows signs of improvement
• SMSF trustees one year capital return expectations have risen since May 2012, however five year capital return expectations remain at four percent
• Trustees willingness to hold and accumulate cash still remains high
• Residential property is increasingly considered the most overvalued asset, with 52% of SMSF investors holding that view.

Concern levels among SMSF trustees retrace as the market shows signs of improvement
Concern levels, as measured by the Investment Trends Investor Intentions Index have retraced over the last few months, however remain high relative to history.  While equity markets are some one thousand points above their March 2009 depths when levels of concern were 7.4 ( out of 10, 10 being extremely concerned). Concern levels among SMSF trustees have reduced from 6.7 in January 2012 to 6.2 in September.

SMSF trustees one year capital return expectations have risen (to six percent) since May 2012, however five year capital return expectations remain at four percent
Against a backdrop on improving domestic equity markets, SMSF investors concern levels have eased over the last few months, short term capital return expectations have increased to 6% for the coming 12 months.  That said, capital return expectations remain low by historical standards and the five year outlook remains at around four percent  per annum.

Trustees willingness to hold and accumulate cash still remains high
Research from the Investment Trends April 2012 SMSF Investor  Report  found that the  ‘wall of cash’ had  continued to grow; representing 28 per cent of total  cash holdings at $133 billion. (This figure includes $50 billion in excess cash which is described as the cash that due to market volatility is currently in cash but would otherwise be invested in other types of assets).

Commenting on the recent research Chief Operating Officer Eric Blewitt said that “despite the official cash rate reducing by 100 points since the earlier research the September SMSF Investor Intentions Index has found that SMSF investors continue to be willing  to hold and increase exposure to cash as an asset class. In-fact 18% of them intend to further increase their allocation to cash in the coming month, whilst less than five percent of them intend to decrease their allocation.”  Blewitt commented that “this is clearly reflective of the ongoing concern that is prevalent among all investors.” 

Residential property continues to be considered the most overvalued asset, with 52% of SMSF investors holding that view
Despite Australians affection with residential property, the perception the asset class is overvalued is a view that is held by a majority of  SMSF trustees.  

With only 18% of SMSF investors seeing residential property as undervalued the valuation perception is one of the explanations as to why residential property as an asset class within SMSFs remains  low at 8% of total assets.

The post SMSF investor intentions index appeared first on AdviserVoice.