SMSF asset allocation
At 30 June 2013, the two most significant SMSF asset holdings continue to be in Australian listed shares, and cash and term deposits (see appendix 1, table 15). Graph 13 shows that 61% of all SMSF assets were directly invested in these two asset classes.
Graph 13: 2013 SMSF asset allocation
Certain asset types have been amalgamated – see table 15 for the complete list of assets.
End of further information
Graph 14 shows annual shifts of SMSF asset holdings by asset type as a proportion of total assets. From 2012 to 2013, there was a decrease of 2% in cash and term deposits and a 2% increase in listed shares, reversing part of the movements from 2011 to 2012 in these assets.
There was a drop in both residential and non-residential real property of over 1% collectively, coinciding with an almost 1% increase in 'all other assets', which is attributable to the increase in assets held under limited recourse borrowing arrangements specifically.
From 2013, changes were made to ATO data collection for assets held under LRBAs and this largely resulted in an increase of LRBA investments to $8.3 billion, or 1.68% of total SMSF assets in 2013, up from $497 million or 0.15% of total SMSF assets in 2009.
Graph 14: Change in percentage of total SMSF assets, by asset type
Graph 15 shows the annual shifts in the proportion of SMSFs holding the same types of assets as in graph 14.
A comparison of graphs 14 and 15 shows that, in 2013, assets in cash and term deposits as a proportion of total SMSF assets decreased, while the proportion of SMSFs holding these assets remained stable.
For listed shares, there was a 2% increase in the proportion of total SMSF assets held, while the proportion of SMSFs holding the assets decreased marginally.
There was a general decrease in the proportion of SMSFs holding each of the major asset types, which may indicate an increase in asset concentration. The only increases were for SMSF holding assets in listed trusts, and ‘all other assets’, which was attributable to debt securities and assets under limited recourse borrowing arrangements. Interestingly, these two assets showed the largest positive change over the five-year period.
In 2013, only a small proportion of SMSFs reported assets held under LRBAs (2.7% of SMSFs), with the majority of these funds holding LRBA investments in Australian residential real property (51%) and Australian non-residential real property (28%). In terms of value, 89% or $7.4 billion of LRBA investments were attributed to real property assets combined (see appendix 1, table 15).
Graph 15: Change in percentage of SMSF population holding assets, by asset type
At 30 June 2013, 78% of SMSF assets were reported as directly invested by SMSFs, with 17% invested in trusts and managed investment structures. In 2009, 20% of SMSF assets were invested in managed investment structures, indicating there is a trend away from investing in this type of asset over the five years to 2013.
The remaining investments included overseas and miscellaneous assets, such as collectibles, assets held under limited recourse borrowing arrangements, and other assets (see appendix 1, table 15).
In 2013, the distribution of asset types held by SMSFs within each asset range was relatively consistent. However, as fund asset size increased, the proportion of assets in cash and term deposits decreased significantly. Funds across most asset ranges tended to favour cash and term deposits, while those with more than $2 million in assets held a higher proportion in listed shares.
Larger funds tend to have a greater proportion of their assets in unlisted trusts and non-residential real property than smaller funds. However, for residential real property the proportion of assets held does not significantly change as fund value grows.
For the year ended 30 June 2013, a comparison of the payment phases of SMSFs shows 37% of SMSFs were in the pension phase and held 56% of reported assets. The assets held by SMSFs in the pension phase have increased by 8% over the five years to 2013.
In 2013, SMSFs reporting in the pension phase had very similar assets to SMSFs in the accumulation phase (see appendix 1, table 16). The only noticeable difference was SMSFs in the pension phase generally held a greater proportion of their assets in listed shares, while accumulation phase funds held a greater proportion in non-residential, residential real properties and LRBAs.