SMSF portfolio weighting shift

The make-up of the investment portfolios of SMSF investors has been transformed over the year since March last year. The just-released SuperConcepts Investment Patterns Survey to the end of March 2016 shows that SMSF exposure to property has increased to 20.4% of SMSF portfolios over 12 months (it was 17% a year ago). The leaning towards property has been made at the expense of Australian equities, which dropped by a slightly less amount, from 38.6% a year before to 35.8% at the end of March.

SuperConcepts found that direct property represented around 78% of the total property allocation. The split between commercial and residential property was 27% versus 73%. The average value per property was $713,000 for commercial property and $404,000 for residential. In terms of borrowings, the average property loan amount was $293,000 compared to $99,000 for financial asset loans.

Of the direct property holder SMSFs utilising limited recourse borrowing arrangements (LRBAs), the survey found that this has slightly decreased over the year, from 37% at the end of March 2016 to 35.6% last March. In terms of which assets were bought using borrowings, 86% of loans related to property, and 14% related to financial assets.

Cash and short term deposit exposure increased from 16.5% to 18.4% of portfolios, while fixed interest and international equities represented 12.3% and 12.6% respectively (down from 13.1% and 14.4%).

Even though the performance of the ASX Top 20 shares was a negative 7.7% for the quarter, the allocation to Australian equities increased, showing trustees benefited from moving away from the top 20 shares within the sector.
Unsurprisingly, dividend favourites Commonwealth Bank, Westpac, Telstra, ANZ and NAB were the five most popular holdings in SMSF portfolios. The overall allocation to managed funds increased from 17.6% to 17.8% for the quarter.

(Download the full survey here.)


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