The quarterly Multiport SMSF Investment Patterns Survey analyses around 1,950 funds, a sample of the SMSFs Multiport administers, and the investments they hold as at 30 June 2013.  The assets of the funds surveyed represent approximately $1.8 billion.

AMP SMSF Administration Head of Technical Services Philip LaGreca said the cut in the concessional contributions cap has been reflected in the fall in the annual average contribution amount but SMSF trustees have not been passive in their investment choices.

“While overall contributions were down for the year, it’s clear trustees are actively managing their investments throughout the year.

“A significant amount of cash holdings moved into the fixed interest sector early in the financial year, with cash down almost 2.7 per cent and fixed interest up 2.6 per cent. The timing of these investments was heavily influenced by the reductions in official interest rates and sentiment about future movements and new capital raisings via bank-issued subordinated notes.

“The allocation to Australian shares was up 0.8 per cent to 37.5 per cent, slightly higher than expected from normal growth in the market.  This was mostly driven by the significant weighting that direct Australian shareholders have in the top 20 stocks, which outperformed the All Ordinaries,” Mr LaGreca said.

June quarter analysis

The decline in overall cash holdings continued for another quarter, with a 1.5 per cent drop to 21.9 per cent during the June quarter.

Fixed interest holdings were up 1 per cent to 12.2 per cent for the quarter and Australian equities holdings decreased by 0.6 per cent to 37.5 per cent, a smaller decrease than expected based on the change for the All Ordinaries for the quarter.

“Trustees generally make larger cash withdrawals prior to 30 June to meet minimum pension requirements for the year, but the continued downward trend for cash has more to do with lower interest rates making cash a less attractive investment.

“Trustees are moving cash holdings into the share market and fixed interest sector,” Mr LaGreca said.  ‘True’ cash is now approaching a level that would seem consistent with the common strategy for pension accounts, of holding cash equivalent to two or three years’ worth of pension payments,” Mr LaGreca said.

The average SMSF contribution inflow per fund doubled to $13,050 for the June quarter compared to $6,805 for the last quarter.   This is in line with the trend shown during previous years where large contributions are generally made during the last quarter of the financial year.

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