SMSFs preferred to allocate investment dollars to listed shares in the 2020 financial year, but cash and term deposits were held by a higher percentage of funds, according to a recently released ATO SMSF statistical overview.
In the overview for the 2019-20 financial year, the ATO reported listed shares made up 26.4 per cent of the total proportion of SMSF assets and were held by 59.9 per cent of all funds. In comparison, cash and term deposits made up 20.7 per cent of the total proportion of SMSF assets, but were held by 96.6 per cent of funds.
In dollar terms, the allocations to listed shares totalled $195.8 billion, an increase of 2.2 per cent from 2018/19.
Listed shares were also more favoured by funds in the retirement phase where they made up 30.8 per cent of total assets, while SMSFs in the accumulation phase held 19.1 per cent of their assets as listed shares. Cash holdings were similar at 21.2 per cent of total assets for funds in retirement phase compared to 19.8 per cent for funds in accumulation phase.
“SMSFs in retirement phase had very similar asset allocations to SMSFs in accumulation phase. The only noticeable differences were that SMSFs in retirement phase tended to favour listed shares,” the ATO said.
“Funds in retirement phase held 64 per cent of total SMSF assets. This reflects a small increase, up one percentage point from 2018/19, but down two percentage points over the five years from 2015/16.”
Funds allocating assets to unlisted shares were at substantially different levels at only 1.1 per cent of total assets – $8.4 billion – and 6.8 per cent of SMSFs allocated to this asset sector.
Recent research released by the SMSF Association found that high cash allocations within an SMSF were a key factor in holding back its return performance once the fund reached a balance of $200,000 or more.
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