Personal investments outweigh super: Rice Warner

Personal investments outweigh super: Rice Warner

Australians have more invested in their personal investments than is held in Australia’s $2.3 trillion superannuation pool, according to research by Rice Warner.

According to Rice Warner’s Personal Investments Market Projections 2017 report, Australians held $2.575 trillion in personal investments last year – 250 billion more than Australia’s entire superannuation pool of $2.325 trillion.

Last year saw a 12 per cent growth in personal investments, the report revealed, representing nearly double the average annual growth of 6.2 per cent across the last decade.

This was despite tax changes that kicked in 1 July 2017 which “caused a short-term dip in the rate of growth of personal investments”, a statement said.

Nearly half (43 per cent) of personal investments were in investment properties, a 2.5 per cent increase from the previous period ending 30 June 2016.

Inequality was also highlighted as an issue that “remains”, with the personal investments of Australia’s richest 5 per cent generally 75 per cent larger than the poorest 5 per cent of the nation.

“This is exacerbated by the necessity for households which lack reliable income and access to credit to protect against emergencies by holding much of their limited savings in low-yielding cash,” the statement said.

The report also indicated that more people had reduced their equity exposure and were reallocating their investments away from traditional assets.

Investors were “seek[ing] out other sources of return via managed funds and other asset classes,” according to the statement.

“Investment in alternative assets, including smart-beta indices and derivative products, grew over 30 per cent.

“These assets are held almost entirely through wrap platforms and master trusts, and are becoming increasingly popular due to their innovative nature and diversification benefits.”

Rice Warner forecasted the personal investments market would effectively double over the next decade.

InvestorDaily has reached out to Rice Warner for further comment on this forecast.

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