AMP LIMITED The SuperConcepts SMSF Investment Patterns Survey September 2016
SuperConcepts 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 around 2900 funds, a sample of the SMSFs SuperConcepts administers and the investments they held at
30 September 2016.
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 over $3.1 billion.
Continued drop in contributions levels after 2016 Budget announcements
The average level of contributions for the quarter was at its lowest level since commencement of the survey in 2007 and continued the trend we saw in the June 2016 quarter. This was clearly influenced by the budget announcement of a lifetime non-concessional contributions cap of $500,000 which was to apply from 1 July 2007.
The survey also showed an increase in Australian Equity allocation, an increase in Hybrid allocation in the Fixed Interest sector and changes in the use of limited recourse borrowing arrangements as a result of the ATO safe harbour guidelines.
The overall asset allocation break-up as at 30 September 2016 was:
Sector | 30 Sept 2015 (%) | 31 Dec 2015 (%) | 31 March 2016 (%) | 30 June 2016 (%) | 30 Sept 2016 (%) |
Cash and short term deposits | 18.7 | 18.0 | 18.4 | 18.0 | 18.1 |
Fixed Interest | 12.0 | 12.3 | 12.3 | 12.2 | 12.7 |
Australian Shares | 36.4 | 35.4 | 35.8 | 34.5 | 35.3 |
International Shares | 12.0 | 12.9 | 12.6 | 13.1 | 12.8 |
Property | 20.4 | 20.8 | 20.4 | 21.7 | 20.6 |
Other (Hedge funds, agricultural funds, private geared & ungeared trusts and collectables) | 0.5 | 0.6 | 0.5 | 0.5 | 0.5 |
Total | 100 | 100 | 100 | 100 | 100 |
Top 10 largest holdings
The table below summarises the 10 largest investments which represent almost 14.7% of the total SMSF assets held. The total number of investments of the funds covered in the survey is just over 8,200. Two of the top ten are pooled structures used for accessing international equities.
The most commonly held ($ invested) investments at 30 September 2016 were:
Ranking Investment | |
1 | Commonwealth Bank Ltd |
2 | Westpac Banking Corporation |
3 | Telstra Corporation Limited |
4 | ANZ Limited |
5 | National Australia Bank Ltd |
6 | BHP Billiton Limited |
7 | Magellan Global Fund |
8 | Platinum International Fund |
9 | Wesfarmers Limited |
10 | CSL Ltd |
Maturing Term Deposits not being rolled over
The level of cash increased from 18% to 18.1%. When taking in consideration performance within the different sectors the cash level should have been slightly lower at 17.8%. The increase appears to be mainly the result of cash distributions being received post 30 June from managed funds. Term deposits with a term up to and including 1 year has declined quite significantly from 5.5% to 4.9% showing maturing deposits not being reinvested but kept in cash due to lower interest rates.
30 Sept 2015 (%) | 31 Dec 2015 (%) | 31 March 2016 (%) | 30 June 2016 (%) | 30 Sept 2016 (%) | |
Cash | 13.1 | 12.6 | 13.1 | 12.5 | 13.2 |
Term Deposits | 5.6 | 5.4 | 5.3 | 5.5 | 4.9 |
Total % | 18.7 | 18.0 | 18.4 | 18.0 | 18.1 |
Contributions, Benefit and Pension payments
The average contribution inflow per fund for the quarter decreased significantly from $10,750 to $3,040 for the quarter. This is the lowest since the inception of the survey in 2007. This shows the significant impact the proposed budget changes have had on member contributions.
The government initially announced a lifetime non-concessional contributions cap of $500,000 which was to apply retrospectively from 1 July 2007. On 15 September 2016 this proposal was abolished and replaced
with draft legislation providing a lower annual non-concessional cap of $100,000 for members with a balance below $1.6 million from 1 July 2017 onwards.
With the existing non-concessional contribution rules ($180,000 per annum or $540,000 on a 3 year bring forward basis regardless of their member balance) still applying for the remainder of this financial year,
we expect a significant uplift in the level of non-concessional contributions prior to the end of the current financial year.
Average Contributions level history20,000
17,500
15,000
12,500
10,000
7,500
5.000
2,500
0
Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16
Financial Quarter
The average benefit and pension payments made per SMSF was $13,220 compared to $17,810 for the June quarter.
This is quite similar prior years with generally only the June quarter showing a strong increase in benefit payments with trustees ensuring they draw the annual minimum pension requirement before the end of the financial year.
During the September quarter 81.9% of benefit payments were pension payments and 18.1% lump sum payments, compared to 79.7% and 20.3% for the previous quarter.
Average Benefit payment level history30,000
25,000
20,000
15,000
10,000
5.000
0
Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16
Financial Quarter
Fixed Interest shows increase in Hybrids allocation
The asset allocation to the fixed interest sector increased from 12.2% to 12.8%. The growth mainly comes from the increased allocation to Hybrids from 6.5% to 7% with a new offer from ANZ as well as reaction to the interest rate cut by the RBA during the quarter.
30 Sept 2015 (%) | 31 Dec 2015 (%) | 31 March 2016 (%) | 30 June 2016 (%) | 30 Sept 2016 (%) | |
Hybrids & other direct holdings | 5.8 | 6.3 | 6.6 | 6.5 | 7.0 |
Term Deposits > 1 year | 1.8 | 1.6 | 1.3 | 1.3 | 1.5 |
Managed Funds | 4.4 | 4.4 | 4.4 | 4.4 | 4.2 |
Total % | 12.0 | 12.3 | 12.3 | 12.2 | 12.8 |
Australian Equity allocation up
The allocation to Australian Equities increased from 34.5% to 35.3%.
With the All Ords currently outperforming the ASX top 20, the increased allocation to Australian Equities shows trustees benefited from moving away from the top 20 shares within the sector.
30 Sept 2015 (%) | 31 Dec 2015 (%) | 31 March 2016 (%) | 30 June 2016 (%) | 30 Sept 2016 (%) | |
Direct Shares | 32.2 | 31.1 | 31.2 | 29.7 | 30.4 |
ETF's | 0.9 | 1.0 | 0.9 | 1.1 | 1.1 |
Managed Funds | 3.3 | 3.3 | 3.7 | 3.7 | 3.8 |
Total Australian Shares % | 36.4 | 35.4 | 35.8 | 34.5 | 35.3 |
Top 10 largest Australian listed securities
Out of the total SMSF assets held, the top 10 listed securities trustees invest in represent 14% of total investments.
During most of the 2015 calendar year, this figure was generally around 20% with trustees investing almost
$1 of every $5 in the S&P Top 10 shares. The top 10 shares now represent just less than 39% of all trustees Australian Equity holdings.
The most commonly held ($ invested) shares at 30 September 2016 were:
Ranking | Company Ranking Company | ||
1 | Commonwealth Bank Ltd | 6 | BHP Billiton Limited |
2 | Westpac Banking Corporation | 7 | Wesfarmers Limited |
3 | Telstra Corporation Limited | 8 | CSL Limited |
4 | ANZ Limited | 9 | Woolworths Ltd |
5 | National Australia Bank Ltd | 10 | Transurban Group |
The Top 10 are the four major banks, a telco, two mining companies, two retailers, a pharmaceutical company
& a transportation company.
AMP Limited published this content on 03 November 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 02 November 2016 22:54:05 UTC.
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