Valuable SMSF investment insights released for Q4 2022

Self-managed super fund (SMSF) technology and administration provider SuperConcepts has released the latest SMSF Investment Patterns Survey which indicates a possible resurgence in term deposits as official interest rates rise.

The survey covers over 4,400 funds, a sample of the SMSFs administered by SuperConcepts, and the investment they held at 31 December 2022 which exceeds $7 billion in assets.

According to SuperConcepts Executive Manager Technical and Strategic Solutions, Philip La Greca (pictured), cash is king with few other options for liquidity.

“We’ve seen a 10% lift in extended term deposits during Q4 2022,” La Greca said, “and it would appear short-term term deposits are still unattractive for investors.”

With the decreasing average age for an SMSF trustee, expect to see significant change in the allocation of investments aligned to a younger demographic in the upcoming years.

Investments such as ETFs prove to be on the rise, but the current environment has left SMSF trustees with few options in terms of investment choices for immediate liquidity.

Findings from this quarter also highlight that fund managers are exploring different investment structures.

“Whilst pooled investment structures still have the lion’s share of international equities, it’s interesting to see that fund managers are branching into different structures to penetrate other sectors as well.”

Property continues to hold its own, with nearly 85% of exposure through direct holdings and all growth in this sector is attributed to the direct subset.

“It will be interesting, however, to observe whether there is a reported decline here in our next quarter’s report as valuations for 30 June 2022 and later appear,” La Greca noted.

Although there is a lot of commentary and questions surrounding “exotic” investments, such as cryptocurrency and collectables, these asset types only equate to 0.1% of the total investment pool.

The results from surveys such as this are crucial to our understanding of the sector as there is limited regular statutory reporting by SMSFs.

Please find a copy of this report enclosed.