A database interrogation performed by Super Concepts on its self-managed superannuation fund (SMSF) database has shown an increase in cash holdings in trustees’ portfolios over the past 12 months.
Allocations to cash and fixed interest during this period rose from 21.63 per cent to 31 per cent.
“It’s come about by way of two factors. The drop in the equities market has meant that proportionately there is more cash in the funds because you’ve had this overall decrease in the value of the portfolio, and the other thing is people did move towards cash last year,” ING head of technical services Graeme Colley said.
“It may be that new contributions coming into the funds are solely sitting in cash,” he said.
Asset allocations to direct property also increased but not as significantly, climbing from 8.17 per cent to 9 per cent.
“We don’t get an overnight valuation of direct property so it may be that those values are just staying stable,” Colley said.
The use of managed funds remained basically the same, dropping slightly from 19.25 per cent to 19 per cent.
Allocations to this asset class were mainly from trustees who were using an adviser and were looking to incorporate a degree of additional diversification into their portfolios, according to Colley.
Trustees’ holdings in listed shares and equities was 38 per cent and they also employed a 1 per cent allocation to unlisted shares, overseas assets and other trusts.
This very small use of unlisted shares meant portfolio values for SMSFs may be a little more accurate than commonly regarded, Colley said.
“It might be skewed with property because we don’t get valuations every day but with the other investments I think they are relatively accurate as to their value,” he said.
