Australia’s self managed superannuation sector took a defensive stance in the lead up to the recent market correction, with investors moving to blue-chip Australian shares and parking money in cash, a new report has found.
According to the Investment Trends/RaboPlus DIY Investor survey, 28 per cent of those surveyed made changes to their asset allocation, compared to 18 per cent the previous year.
The report found a number of SMSF were anticipating a market correction, as a proportion cited a positive outlook on Australian equities fell 43 per cent (from 42 per cent to 24 per cent).
While 24 per cent said their reason for the move was due to accumulating cash, and 14 per cent they were adopting a more defensive stance.
“While SMSFs are typically quite passive investors, last year saw a much higher than normal proportion tweaking their portfolio in order to adopt a more defensive stance,” Investment Trends principal Mark Johnston said.
The report also found that a higher proportion of people were putting larger sums of money into their SMSF than previous years, sparking a rise in the number of SMSFs with more than $1 million invested.
RaboPlus head of financial services Bryan Inch said the report, which was conducted well before the market correction, found many SMSF DIY( do-it-yourself) investors are liquidating property and cashing up.
“With the continued volatility in the markets, DIY investors will increasingly look for less risk and more safe havens, and to diversify into high yielding online savings accounts, managed funds and listed property trusts,” Inch said.
The report also found of the SMSFs using international managed funds, more than 46 per cent believed the diversification of portfolio was the main reason to invest in managed funds with international equity exposure.
As of May, SMSFs had an average balance of $741,000 with two per cent in online savings, three per cent held in cash in the bank and four per cent in term deposits. The SMSFs also had varying amounts in other asset classes such as managed funds, residential or commercial property and shares.
The report was conducted in May and surveyed 2,139 SMSF investors.
