SMSF Investors react cautiously to market challenges

Brett Marsh

Brett Marsh

SMSF Investors are reacting with caution to current volatile market conditions by increasing their holdings in Cash and Term Deposits, according to new data released by OneVue.

Investment in Cash and Term Deposits rose by 2.7% to 19.9% in the March quarter of this year, compared to the December quarter of last year, according to trend statistics monitored in a quarterly survey of OneVue SMSF investors. It’s the biggest quarterly jump for this asset class in OneVue statistics since 2012 and reverses a declining trend in these asset classes for most quarters since then.

“The timing of this jump coincides with challenging equity market conditions, with a major fall in equity markets last August, followed by an increase in volatility from December to February,” said OneVue Head of Product and Transactions, Brett Marsh.

“All investors are reacting cautiously amid these global shifts and SMSF investors are no exception.”

A greater use of professional investment management also continues to be displayed by OneVue SMSF investors. “SMSFs are recognising the need for good advice and good investment management,” said Mr Marsh.

“The recent performance of popular picks such as resource and banking stocks have highlighted a need for some SMSFs to diversify and see managed funds as more attractive. But there is still an overall weighting towards direct assets such as property, cash and term deposits and shares.”

Cash and Term Deposits are now the fourth-biggest asset class in investments held by OneVue SMSF investors. The top three are managed funds (unitised trusts), then Separately Managed Accounts (SMAs), then Listed Shares.

In OneVue SMSF investment trends over the past year, managed funds (unitised trusts) rose to 28.74% for the March quarter of this year (compared to 23.09% in the March quarter last year), SMAs rose to 25.14%, (up from 22.81% over the same period), while Listed Shares dropped to 20.91% (down from 26.42%). Direct property also fell to 7.85% (down from 9.37% over the past year).

Advisers are also continuing to access professional investment management through actively managed and passively managed trusts, in particular asset classes such as international, infrastructure and alternatives, said Mr Marsh.

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