Millions of superannuation dollars are sitting in cash awaiting investment allocation, according to advisers cooling their heels after the June 30 rush.
As planners finalise their statements of advice in the next month, there has been speculation there will be a run on equities.
Net inflows into the Asgard platform were up $1 billion compared to June 2006, and total cash had gone up 30 per cent, St George wealth management chief Geoff Lloyd said.
However, planners might be allocating more to cash because of their view on the equity markets and cash in self-managed superannuation funds (SMSF) might buy assets, Lloyd said.
“I doubt there’s a huge influx about to invest in equity markets; that’s my observation,” he said.
Macquarie head of wrap product Doug Chang said Macquarie Wrap had $1 billion in net inflows and $3 billion into its cash management trust (CMT).
“Whether there’ll be a rush [on equities] in July, I’m not sure. Some advisers are keeping an eye on the market conditions and staggering their allocations,” Chang said.
Accru Financial Planning managing financial planner and director Matthew Kidd said: “I think you’d be mad to think there won’t be a spike.
“There’s a lot of scepticism about the market and that’s because there’s a lot of sentiment; I hate sentiment . Australia’s got low unemployment, low inflation, steady interest rates, the resources boom is still going to continue for years to come and the China story has just begun.”
The negative outlook was perpetuated by economists and commentators in the media, Kidd said.
“There’s got to be millions or billions sitting in cash. We will have a run on equities – the money’s got to go somewhere,” he said.
Prescott Securities chief economist Darryl Gobbett was also bullish about the Australian market. All his clients are up to their limit in Australian stocks.
Analysts and investors were waiting for any impact from the US market before making their allocations, Gobbett said.
