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Mixed phase SMSFs see greatest jump in growth
SMSFs with assets in both accumulation and pension phase have seen the biggest increase in assets since March last year, according to the latest data from Class.
In March last year, Class conducted an analysis based on its software users following the introduction of the transfer balance cap in July 2017, which showed the breakdown of SMSFs in accumulation phase, pension phase or both, and the assets they hold.
At the end of March 2018, mixed phase SMSFs, with both accumulation and pension assets, had the largest amount of assets, with the average mixed phase SMSF holding $2,306,000 in net assets.
Pension phase SMSFs held $1,215,000 in net assets on average while accumulation phase SMSFs held $781,000.
The latest Class SMSF Benchmark Report for December 2018 indicated that since March, mixed phase SMSFs saw the greatest growth on average, with net assets increasing by 4.6 per cent up to $2,412,000.
Accumulation phase SMSFs, on the other hand, only increased by 2.9 per cent to $804,000 in net assets. Pension phase SMSFs unsurprisingly decreased, falling by 13.6 per cent to an average of $1,050,000 in net assets per fund.
The report said that while mixed phase SMSFs are not the largest SMSF member segment, they continue to hold significantly more in net assets per member than those in accumulation or pension phase.
At the end of December, 52 per cent of Class software users were in accumulation phase, 17 per cent were in pension phase and 31 per cent were in both.
The December report also indicated that managed funds continue to be a popular way of diversifying into international equities for SMSFs.
Amongst the top 20 managed funds held by SMSFs, international equities account for 51.6 per cent of the assets held in these managed funds.
The analysis also looked at a much broader group of over 3,000 managed funds held by SMSFs. Amongst this group of funds, international equities comprise the highest proportion of assets at 34 per cent. This was followed by Australian equities at 24 per cent and fixed interest at 11.2 per cent.
The analysis also showed that for SMSFs that invest in only one managed fund, 32 per cent of them are focused on international equities.
For SMSFs with two managed funds, 55 per cent of the time at least one of the two funds will be invested primarily in international equities.
“As SMSFs increase the number of managed funds they invest in, they also increase their diversity across different asset classes,” the report said.
“For example, by the time an SMSF is holding four managed funds, 52 per cent of the time at least one of them will be targeting Australian equities.”
Miranda Brownlee
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.
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