POWERED BY MOMENTUM MEDIA
SMSF asset growth trailing industry super funds
While the growth of self-managed superannuation funds (SMSF) assets is currently behind the pace of industry funds, they are still outperforming retail super funds.
A recent Rainmaker report based on statistics from the Australian Taxation Office (ATO) indicated that in the five years to March 2022, total assets in SMSFs grew 5.4% per annum.
This was about half the rate of the growth of the not-for-profit fund segment which saw its total assets increase 10.1%.
Retail super funds saw the slowest growth, increasing just 3.1% per annum.
The research company noted that the growth of SMSFs has slowed since the introduction of the transfer balance cap in 2017.
Rainmaker Information executive director of research and compliance, Alex Dunnin, said despite the dampened metrics, the SMSF segment is still a huge pool of capital, particularly for fund managers able to attract it.
According to the ATO, almost one dollar in every five held in SMSFs was in a pooled investment product, being a managed fund, a life insurance policy or some type of collective trust.
This equated to $168 billion, almost half the size of the entire retail managed funds sector—which made it a significant funds management opportunity, particularly as this SMSF allocation had consistently increased.
Rainmaker noted that SMSFs were well positioned during the start of the pandemic due to their exposure to cash which accounted for around 25% of all assets in 2020.
The exposure to cash had since declined among SMSFs.
SMSF assets held in equities and property has stayed remarkably stable and remains at around 36% per cent and 16% respectively.
Fixed interest, on the other hand, is showing explosive growth with fixed interest holdings growing fivefold, according to the research company.
“While equities, property and other asset classes have stayed steady, pooled investments and fixed interest appear to be where funds are being diverted,” said Dunnin.
“SMSF investors appear to be maintaining a preference for the more risk averse asset classes, but a surge in interest rates may play a role in returning funds back to cash.”
AUTHOR
Miranda Brownlee
Recommended for you
The impact of identity theft and its threat to superannuation savings were highlighted in a case that went before the Federal Court at the end of 2023.
A recent NSW Supreme Court decision is an important reminder that while super funds may be subject to restrictive superannuation and tax laws, in essence they are still a trust and subject to equitable and common law claims, says a legal expert.
New research from the University of Adelaide has found SMSFs outperformed APRA funds by more than 4 per cent in 2021–22.
The SMSF Association has made a number of policy recommendations for the superannuation sector in its pre-budget submission to the government.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
36.43 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
35.08 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.72 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
29.60 3 y p.a(%)
5
Global X GlobalX FANG+ ETF
27.64 3 y p.a(%)
