AMP LIMITED
Multiport undertakes a quarterly analysis of its SMSF client investments to get a closer insight into how SMSF trustees invest and to identify emerging investment trends.
The survey covers just over 2500 funds, a sample of the SMSFs Multiport administers and the investments they held at 31 December 2014. Funds are administered on a daily basis which ensures data is based on actual investments and is completely up to date. The assets of the funds surveyed represent just under $2.7 billion.
The overall allocation to ETF's and Managed Funds increased for the quarter. ETF's now represent 4.2% of total SMSF assets and Managed Funds represent 19.5% of total SMSF assets. Over 29% of non- cash or Term deposit investments are now made through pooled vehicles.
The allocation of International Equities increased for the quarter as the fall of the Australian
Dollar has resulted in the upward revaluation of overseas assets.
Cash holdings again continued to fall and are at the lowest level since the commencement of our quarterly surveys in 2007, with record low interest rates making cash a less attractive investment.
The overall asset allocation break-up as at 31 December 2014 was:
Source: Multiport Pty Ltd
Top 10 largest holdings
The table below summarises the 10 largest investments which represent almost 19% of the total SMSF assets held. The total number of investments of the funds covered in the survey is just over 6750. Three of the top ten are pooled structures.
The most commonly held ($ invested) investments at 31 December 2014 were:
Ranking Investment |
1 Commonwealth Bank Ltd |
2 Westpac Banking Corporation |
3 ANZ Limited |
4 Telstra Corporation Limited |
5 BHP Billiton Limited |
6 National Australia Bank Ltd |
7 Magellan Global Fund |
8 Woolworths Ltd |
9 Platinum International Fund |
10 Vanguard Aust Shares Index ETF |
Overall cash holdings again declined compared to the previous quarter. The current level of
16.5% is the lowest level recorded since commencement of our quarterly surveys in the year
2007. Low interest rates continue to make cash less attractive as an investment so maturing term deposits are not being replaced with new term deposits.
30 31 30 30 31 Dec March June Sept Dec 2013 (%) 2014 (%) 2014 (%) 2014 (%) 2014 (%) |
Cash 12.1 12.2 12.2 11.7 11.6 |
Term Deposits 6.1 5.3 4.9 |
Total % 19.1 18.6 18.3 17.0 16.5 |
Source: Multiport Pty Ltd
Contributions, Benefit and Pension payments
The average contribution inflow per fund increased from $12,125 to $13,715 for the quarter.
The average contribution for the current December quarter of $13,715 is proportionally higher compared to previous years, with $10,830 for December 2013 and $6,585 for December 2012.
This increase is most likely the result of the increase of the rate of Super Guarantee to 9.5%
and indexation of both the concessional & non-concessional contributions cap.
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14
Financial QuarterSource: Multiport Pty Ltd
The average benefit and pension payment amount made by SMSFs for the quarter was
$21,105 compared to $18,160 for the previous quarter. Part of this increase was due to increased pension commencement to lock in the grandfathered social security treatment for pensions by 31 December 2014.
During the December quarter 35% of benefit payments were lump sums and 65% were pension payments, compared to 22% and 78% for the previous quarter.
30,000
25,000
20,000
15,000
10,000
5,000
0
Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14
Financial QuarterSource: Multiport Pty Ltd
Fixed Interest shows slight increaseThe quarter showed a slight increase in managed funds and longer term deposits, which indicate trustee's attempts to lock in interest rates in anticipation of further interest rate cuts.
31 31 30 30 31 Dec March June Sept Dec 2013 (%) 2014 (%) 2014 (%) 2014 (%) 2014 (%) |
Hybrids & Other direct 6.9 6.5 6.3 6.8 6.6 holdings |
Term Deposits > 1 year 1.8 2.0 2.0 2.0 2.2 |
Managed Funds 3.4 3.7 3.9 3.6 3.9 |
Total % 12.1 12.2 12.2 12.4 12.7 |
Source: Multiport Pty Ltd
Australian EquitiesDuring the quarter, the All Ordinaries increased by 1.73%, therefore based on performance of the market the theoretical allocation should have been around 40.9%. Actual allocation to Australian Equities increased to 41.6%. This demonstrates a slight inflow of new funds into the sector, as well as the impact of the higher performance of the top 20 shares.
31 31 30 30 31 Dec March June Sept Dec 2013 (%) 2014 (%) 2014 (%) 2014 (%) 2014 (%) |
Direct Shares 33.9 33.5 33.2 34.4 32.5 |
ETF's 2 2.2 2.3 2.9 3.9 |
Managed Fund 3.6 3.9 3.8 4.5 5.2 |
Total Australian Shares % 39.5 39.6 39.3 41.8 41.6 |
Source: Multiport Pty Ltd
Top 10 largest Australian listed securities now includes an ETF
Out of the total SMSF assets held, the top 10 listed securities trustees invest in represent
18.3% of total investments and 44% of total direct Australian Equity Holdings. This top 10 has generally only included listed shares but now for the first time also includes a listed ETF.
The most commonly held ($ invested) shares at 31 December 2014 were:
Ranking Company S & P Top 10 Constituents by Market Cap | |
1 Commonwealth Bank Ltd BHP Billiton Limited | |
2 Westpac Banking Corporation National Australia Bank Ltd | |
3 ANZ Limited Commonwealth Bank Ltd | |
4 Telstra Corporation Limited Rio Tinto Limited | |
5 BHP Billiton Limited ANZ Banking Group | |
6 National Australia Bank Ltd Westpac Banking Corporation | |
7 Woolworths Ltd Woolworths Ltd | |
8 Vanguard Aust Shares Index ETF | Scentre Group |
9 Wesfarmers Limited Fortescue Metals Group Ltd | |
10 Woodside Petroleum Ltd Wesfarmers Limited |
Source: Multiport Pty Ltd
The Top 10 by market cap in the index are four banks, three mining companies, two retailers and a property management business.
International holdings show a slight increase mainly due to performance
Exposure to International Equities increased by 0.8% to 12.5% of fund assets. When taking into consideration the increase in performance in the sector for the quarter, the allocation in percentage terms should have increased to 12.2% if trustees left their initial allocation unchanged. This shows trustees have only slightly increased exposure to sector, with actual allocation going up to 12.5%.
The split between Managed Funds and direct investment continues to show pooled structures are the preferred method of investing in overseas markets due to the complications still present in investing overseas directly.
ETF holdings have continued to increase over the past few quarters with nearly 17% of international holdings being held via ETFs.
The table below shows the break up between direct shares, ETF's and Managed Funds as part of the International Equity holdings.
31 31 30 30 31 Dec March June Sept Dec 2013 (%) 2013 (%) 2014 (%) 2014 (%) 2014 (%) |
Direct Shares 1.6 1.7 1.8 1.8 1.9 |
ETF's 1.6 1.8 1.9 1.9 2.1 |
Managed Funds 7.6 7.2 7.8 8.0 8.5 |
Total % 10.8 10.7 11.5 11.7 12.5 |
Source: Multiport Pty Ltd
Exposure to Managed Funds increasing
The allocation to Managed Funds went up significantly from 17.9% to 19.5% for the quarter. The table below summarises the Managed Funds exposure as a percentage of total
investments amongst the different asset categories. This shows an increase in the managed
fund component amongst all asset categories, specifically for the Australian & International Equities sector with the International equities movement partially the result of the movement in the Australian Dollar for the quarter.
31 31 30 30 31 Dec March June Sept Dec 2013 (%) 2014 (%) 2014 (%) 2014 (%) 2014 (%) |
Cash & Fixed Interest 3.6 3.8 4.0 3.8 4.1 |
Australian Equities 3.6 4.0 3.8 4.5 5.2 |
International Equities 7.6 7.2 7.8 8.0 8.5 |
Property & Other 1.7 1.8 1.8 1.6 1.7 |
Total 16.5 16.8 17.4 17.9 19.5 |
Source: Multiport Pty Ltd
Top 10 largest Managed Funds
The table below summarises the top 10 largest managed fund holdings which represent almost 29% of managed funds and 5.6% of total SMSF assets held.
The most commonly held ($ invested) managed funds at 31 December 2014 were:
Ranking Investment |
1 Magellan Global Fund |
2 Platinum International Fund |
3 MLC MasterKey Super - Vanguard Aust Share Index Fund |
4 Walter Scott Global Equity Fund |
5 Platinum Asia Fund |
6 Schroder Fixed Income Fund W/S |
7 IOOF WIS Blended Aust Geared Shares |
8 Bentham W/S Global Income Fund |
9 Skandia GWS - GSJBWere Aust Infrastructure |
10 IFP Global Franchise Fund |
The Top 10 managed funds include 6 International equity funds and 4 Australian funds being an index fund and 3 specialist funds which reinforces the view that SMSF trustees use managed funds in areas where they have limited expertise.
Property allocation remains static
The asset allocation to Property declined slightly to 16.1% in percentage terms for the quarter mainly due to changes in the clients in the survey
Out of the total number of direct properties held by the funds in the survey, commercial property represented 22% of all property holdings and residential property accounted for
78% of property holdings. These figures have remained unchanged compared to the previous quarter.
The average value of each property was $426,716 for residential property and $662,428 for commercial property.
31 31 30 30 31 Dec March June Sept Dec 2013 (%) 2014 (%) 2014 (%) 2014 (%) 2014 (%) |
Direct Property 14.1 14.2 14.2 12.2 12.4 |
Listed Property 1.5 1.6 1.6 1.5 1.6 |
Managed Funds 1.2 1.2 1.2 1.1 1.2 |
Other (Syndicates, 0.8 0.8 0.8 0.7 0.9 Unlisted Trusts etc) |
Total % 17.6 17.8 17.8 16.3 16.1 |
Source: Multiport Pty Ltd
Increase in Limited recourse borrowing arrangements
Around 16% of the total number of funds in the survey are currently utilising a borrowing arrangement, compared to 14.8% during the previous quarter.
In percentage terms, 58% of all gearing arrangements relate to property, with financial asset loans representing 42% of the number of loans. As for the loan values, the average property loan amount was $263k compared to 80k for financial asset loans.
At the end of the June quarter 35.9% of all direct property holders had a gearing arrangement in place, up from 34.4% from the previous quarter. The table below shows the percentage of geared property for the year.
The graph below shows the split across direct property and financial assets of the value of total borrowings at 31 December 2014.
Borrowing across Assets
Financial Asset Loans,
17.76%
Property Loans
Financial Asset Loans
Property Loans,
82.24%
For any queries in relation to this Investment Pattern Survey please contact Philip La Greca on (02)
9257 5326 or Philip@multiport.com.au. Philip La Greca is Head of Technical Services.
Multiport is a leading specialist SMSF and Managed Account administration company. The vast majority of Multiport administered SMSFs have a wide range of financial advisers providing investment advice to the trustees and this may make the analysis results different to the wider SMSF community.
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